pem-pal - 2nd internal auditors’ community of practice workshop

Republic of Croatia - Ministry of Finance Central Harmonisation Unit & Internal audit Division

PEM-PAL - 2nd Internal auditors’ Community of Practice WorkshopChisinau, Moldova, June 20-22 2007

Development and implementation of Development and implementation of internal audit strategy in Croatia for internal audit strategy in Croatia for

the change of public sectorthe change of public sector

Tomislav Mičetić, CPIA, CAE


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Contents

Strategy what is it, drafting, inputs, process

CroatiaDevelopment of IA strategy

IA development in brief

Legal framework

Lesson learned

Conclusion


Strategy – what is it?

Management plan or method for completing objectives; plan of procedures to be implemented, to do something. (Source: www.answers.com)

IA Strategy – plan to implement IA according the internationally accepted IIA standards in the public environment

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Strategy drafting - overview

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PROCESS of drafting strategy

OUTPUTIA strategy

Learning

INPUTS (staff, IT,

informations, equipment, projects)


Strategy drafting- inputs

Government support European Union as target

Leader - CHU head

CHU with:English skilled people – CORE WORKGROUP

External project assistance

Information of other countries examples of strategies

Extended workgroupSAI, academics, inspection services

Administrative Cooperation Agreement with DG Budget

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PROCES of drafting strategy

OUTPUTIA strategy

Learning

INPUTS (staff, IT,




Process of drafting strategy

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Drafting Compliant

(i.e. DG Budget)

Check (by workgroupCORE and

EXTENDED)

NO

Yes


OUTPUTIA strategy

Learning

INPUTS (staff, IT,



IA development strategy

Part of PIFC (Public Internal Financial Control) Strategy

PIFC = FMC + IA + CHU

FMC – Financial management and control

IA – Internal Audit

CHU – Central Harmonisation Unit

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OUTPUTIA strategy

Learning

INPUTS (staff, IT,



Croatia in brief

4,5 mil. Inhabitants - 7.700 € per capita

15 bil. € annual budget – central state level

~3000 budget users

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Development of PIFC strategy in Croatia + outputs

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PIFC strategy

2004

PIFC strategy

2005

Action plan for

PIFC until end of 2008

-IA rulebook -IA rulebook-PIFC law-IA manual-Certification system for IA

-IA rulebook-FMC training

Outp

uts


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Internal audit in PIFC Strategy (2005) – Example of output

Contents:Existing situation and weaknesses

Organisation of IA on goverment SAB’sJob title: Internal auditor

Development of Internal AuditPIFC law finalisationCriteria for IA establishmentEndorsment of IA CharterDevelopment of methodologyDevelopment of IA Strategy and Annual plans

Training of internal auditorsSee: Croatia PIFC 2005 Strategy: Chapter 4.2.


2003

MoF department for internal audit and control established – CHU

Assistant minister + 3 civil servants

Budget lawintroduction of IA in the public sector

managerial responsibility

budget inspection

Start of EU funded project CARDS 2002 “Development of Public Internal Financial Control and Internal Audit”

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2004

Signed Administrative Cooperation Agreement (ACA) with European Commission - DG Budget in the area of the PIFC - Chapter 32.

Rulebook on budget users IA

PIFC strategy adopted by Government

TAIEX – PIFC presentation for Croatia

2nd workshop for CHU – Hungary

Start of IA training and certificationSession held by CARDS 2004 project

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2005

Change of MoF organizational decreeDepartment for harmonization of internal audit and financial control

Internal audit department

FMC department

WB - Country Financial Accountability Assessment (CFAA) - recommended:

Further development of legal documents

Strengthening capacity of CHU

Further promotion of documents

Updated PIFC policy paper – in force

IA training taken over by local trainers-professionals

1st seminar of Internal auditors

New Rulebook on Budget users internal auditCriteria for IA establishment

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2006

3th workshop of CHU- Bled-Slovenia

Start of CARDS 2004 project – “Strengthening of the PIFC structure in the Republic of Croatia“

Awareness raising seminars for managers and FMC persons

Explanatory and bilateral screening

2nd IA seminar of IA

PIFC law passed

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2007

FMC modules started for FMC champions

Drafting of PIFC policy for local self - government level

CHU Action plan on development and implementation of PIFC until end of 2008 – continuing the development of IA

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Croatia - Legal framework for Internal audit

Code of ethics Internal audit standards

Rulebook for budget users IAInternal audit manual

PIFC Law PIFC policy

Decree on organisation of SABsRulebook for job description of SABs

Charter of internal auditorsWorking procedures of IAD

Strategic/annual planInternal audit programmes/guidelines

Internal audit reports/Follow up

Sta

teC

HU

SA

Bs


Lesson learned

Be not to ambitious

Start with good contents

Strategy – good tool for start of IA development

Transparency and marketing

EU – moving target

PIFC – IA – good tool for fight against corruption – preventive measure

PROCES of drafting strategy

OUTPUTIA strategy

Learning

INPUTS (staff, IT,



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IA - Conclusion

“Change is the law of life. And those who look only to the past or present are certain to miss the future.”

(John F. Kennedy)HRM – Staff is key of success!“Success is the result of perfection, hard work, learning from failure, loyalty, and persistence.”

(Colin Powell)


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CHU: http://www.mfin.hr/str/100/#509

CARDS 2004 and CHU: http://pifc.mfin.hr

For additional info visit:


Abbreviations

CAE- Chief Audit Executive

CFAA- Country Financial Accountability Assessmentt

CHU – Central Harmonisation Unit

CPIA- Certified Public sector Internal Auditor

HRM – Human Resource Management

FMC – Financial management and control

IA – Internal Audit

IAD - Internal Audit Department

MoF – Ministry of Finance

SABs – State Administrative Body

WB- The World Bank

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pem-pal - 2nd internal auditors’ community of practice workshop

Documents