The Netherlands Court of Audit

1. The Netherlands Court of Audit Audit approach System based approach & Single audit Ton Kok Netherlands Court of Audit t.kok@rekenkamer.nl single audit Netherlands Court of Audit

2. Content • Audit environment • Audit approach NCA • Definition Single Audit • Conditions using single audit • Single Information and Single Audit (SISA) single audit Netherlands Court of Audit

3. Audit environment Constitution and ‘comptabiliteitswet’ -> powers, checks and balances, requirements for financial management etc. single audit Netherlands Court of Audit

4. Dutch governance system Report Audit opinion Parliament Court of Audit Auditchain Minister Financial management Internal control (supervision) Report Audit opinion Secretary General (Audit Committee) Accountability report Internal Audit Department Central Directorate for Financial & Economic Affairs (internal control) Policy directorates Report Audit opinion Beneficiaries - local government - care and health - education - industry Accountability report External private Audit single audit Netherlands Court of Audit

5. Definition Single Audit • No clear international accepted definition • In general it is a name which covers a way of thinking about a situation where one entity is subject to many audits or the entity has already been audited by an other auditor single audit Netherlands Court of Audit

6. Audit activities (single audit) I Reliance on the work of others • Review of the audit departments' audit work • 1.review of audit files • 2. interviews/consultation • 3. reperformance II Additional audit work by the Court of Audit • B. Systems-based • C. Substantive single audit Netherlands Court of Audit

7. Standards used A. International standards on auditing • 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information; • 600-699 Using Work of Others | 610 Using the Work of an internal auditor; 620 Using the Work of an auditor’s expert • 100-999 Assurance Engagements to audit historical financial information. B. International Standards of Supreme Audit Institutions single audit Netherlands Court of Audit

8. Internal Audit Department I Planning II + III Execution Evaluation/ reporting International Standards on Auditing (IFAC) Capacity auditors (Certified Public Auditors) single audit Netherlands Court of Audit

9. Review Internal Audit Department I Organisation and planning: • Capacity (quality and quantity)? • Are norms specified? • Materiality? • When is a transaction regular or not? • Are recent developments taken into account? • Is risk analysis performed well? • Are enough tests of control and substantive tests planned? Planning's phase single audit Netherlands Court of Audit

10. Review Internal Audit Department II+III Execution: • Is the audit performed well (material audit, right norms, right selection of audit objects, etc) • Is the audit performed according to plan? Reporting: • Are all findings taken into account? (closing documents) • Quality evaluation Execution and reporting phase single audit Netherlands Court of Audit

11. Reports NCA (single audit) Accountability Day (each year in May) In 2011 we published our: State of Central Government Accounts + 28 reports (for each budget chapter of 2010) + Report on the Dutch EU meber state declaration 2010 single audit Netherlands Court of Audit

12. Single Information and Single Audit Why? • Developed with regard to grants given from central to local government • Many grants from different ministries with specific provisions • Many accountability and audit reports Solution • Single information + Single audit single audit Netherlands Court of Audit

13. Heroïneverstrekking WWB Stads-economie Externe Veiligheid Verkeer envervoer Jaarrekening Bestrijding rampen Cultuur-bereik Acc. verklaring Acc. verklaring Acc. verklaring Acc. verklaring Acc. verklaring Acc. verklaring Acc. verklaring Acc. verklaring From multiple to single accountability One accountability report for all stakeholders single audit Netherlands Court of Audit

14. Single audit • Annual (financial) report and audit is leading • No longer for each specific grant a separate audit (protocol) • Reference and standards for local auditor • General auditing standards • Requirements for all specific grants in a note for the auditor • Regulation of specific grants single audit Netherlands Court of Audit

15. Single review • Auditor of local government covers all specific grants in his annual audit activities • Also on central state level the auditors of the ministries are working together • One review team reviews and verifies the quality of the locally performed audits for different ministries (selection based upon risk-analyses and sampling) single audit Netherlands Court of Audit

16. Pro and contra Single audit PRO Systematic control and audit Asks for adequate system and management Less audit burden Less resources CONTRA Only paper Chain is as strong as weakest connection No statistical underpinned statement 16 single audit Netherlands Court of Audit CAP 2010 Experiences in the Netherlands 25-27 October 2010

17. Questions? single audit Netherlands Court of Audit

18. Developments • Result of New Public Management • ‘in control statements by minister, including regularity’ • Non financial information (VBTB) • Centralisation of internal audit departments • Financial crisis single audit Netherlands Court of Audit

19. Policy (VBTB) Budget • Goal: make budgetary process more policy-oriented. Three questions (known in the Netherlands as the www-questions): • What do we want to achieve? • What will we do to achieve it? • What will be the costs of our efforts? single audit Netherlands Court of Audit

20. Policy (VBTB) Annual report • After budgetary year, the governments national annual report will have to answer the logical equivalents to these three questions: • Have we achieved what we intended? • Have we done what we should have done in achieving it? • Was the cost what we had expected? single audit Netherlands Court of Audit