3.3. The SAI of the Netherlands – assessing financial risk exposure of government

110 – 3 – SUPREME AUDIT INSTITUTIONS’ INPUT INTO POLICY IMPLEMENTATION

Executing the budget

Box 3.2. The SAI of Poland – the annual state budget execution audit Objective

The state budget execution audit is undertaken annually to provide objective knowledge about the status of the state and how it functions, including the regularity of collecting and spending public funds. The main objective is to assess the implementation of the Budget Act for the year and to issue an opinion on the financial settlement of the state budget. This audit, required by the constitution and act of the SAI, is one of the basic functions of the SAI. The audit presents the status of the public finance sector by appraising the effectiveness of public expenditure in solving the most important socio-economic problems in select areas of the state.

Type

Financial, compliance, performance.

Scope and methodology

The scope of the audit includes: 1) the execution of revenues, expenditures and deficit of the state budget and its financing sources; 2) the execution of income, expenditure and outcome of the European funds budget; 3) receivables and liabilities, including liabilities under contracted loans and issued treasury bonds; and 4) the execution of financial plans of selected public sector entities. For the year 2014, the audit covered 234 units from the public sector (ministries, central offices, governmental agencies and institutions and various subordinate units).

The findings of this audit should provide an assessment of: 1) the execution of the state budget and European funds budget by main administrators (ministries, heads of central offices and public sector institutions), and the implementation of financial plans by the heads of state budgetary units (trustees second and third degree); 2) the correctness and completeness of accounting records in selected parts of the state budget, with the most significant impact on the implementation of the state budget and European funds budget; 3) the implementation of financial plans of extra-budgetary public sector entities; and 4) performance of the banking service of the state budget and European funds budget.

The last budgetary audit in 2014 was conducted in accordance with the act of the SAI. It used the methods and techniques of auditing recommended in international auditing standards, and was based on the standards of the SAI and methodological assumptions for supervising the implementation of the state budget. The scope and detail of checks carried out in different budgetary elements varied.

A detailed examination of accounting records for correctness and completeness in selected units was conducted in accordance with international standards on using a sample of accounting evidence and records. There are two statistical methods of selecting this sample: monetary unit sample (MUS - taking into account the value of the transaction) or simple random sampling method accounting documents. SAI’s examination also covered accounting books, and detailed checks of the credibility of accounting records in terms of their influence on current accounts and annual statements.

The examination was preceded by an assessment of key elements of the management control system. The SAI has continued to focus its research aimed on identifying the main trends in public expenditure. The scope of the budgetary audit was extended to include the monitoring of tangible indicators, which show the performance of budgetary tasks. Audit indicators were established in areas such as: compulsory social security, transport and communications, agriculture and fisheries policy, national defence, social policy, science and higher education, public safety, health, education and upbringing, culture and protection of national heritage, and municipal economy and environmental protection.

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