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New Challenges and Strategy of the Estonian SAO

New Challenges and Strategy of the Estonian SAO. Aivo Vaske Head of Methodology, Planning and Reporting Service, State Audit Office (SAO) of Estonia aivo.vaske@riigikontroll.ee. What is the SAO and what are our products?. Ca 1,5M USD per year 85-90 persons 60 audits.

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New Challenges and Strategy of the Estonian SAO

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  1. New Challenges and Strategy of the Estonian SAO Aivo Vaske Head of Methodology, Planning and Reporting Service, State Audit Office (SAO) of Estonia aivo.vaske@riigikontroll.ee

  2. What is the SAO and what are our products? • Ca 1,5M USD per year • 85-90 persons • 60 audits

  3. Estonian public sector - Two kinds of pressure to the Government • Higher standards in private sector • EU expectations for administrative capability

  4. Estonian public sector - Wider environment • Principles of good public management (responsibility, accountability, transparency, efficiency etc) are not well understood and not followed • Lack of formal prioritising in resource level – all legal tasks are equal • New ideas in Public Management are well known and sometimes implemented • Major reforms in (eg. zero based budgeting and performance mgmt) have not been very successful

  5. Estonian public sector - Budgeting, accounting and auditing • Riigikogu does not deal with results of budget year in the budgeting process • Budget is on cash basis. Also there is accruals-based information that is less used • The budgeting process and practice is mainly incremental • The role of auditing and auditors and the difference between audit and direct control is not well understood • Model for management/reporting/auditing is not clear – what reports and role of IA-s

  6. The logical position of the SAO in the management and control system

  7. Question for the SAO • What does Riigikogu actually want from us?

  8. What have we decided on the strategy level? • Not to wait until the Riigikogu take the initiative. • SAO is top of an audit pyramid and should use work of IA-s • Audit strategy based on the three product pillars policy • Designed our organization also to support this policy

  9. Three product pillars’ strategy of the SAO - Background information • FINANCIAL AUDIT • OPERATIONAL RISKS AUDIT • PERFORMANCE AUDIT

  10. Three product pillars’ strategy of the SAO - Background information - FA • Goal of financial audit • SAO should be to assess, on an annual basis, the accuracy of the financial statement provided to the Parliament by the Government, the compatibility of the activities with the relevant laws and provisions as well as the soundness of financial management • First step: accuracy and soundness of financial accounting in the public sector

  11. Three product pillars’ strategy of the SAO - Background information - OrA • Goal of operational risks audit • SAO should support the development and implementation of the policy for preventing abuse and misuse by the Government and the responsible ministers so that known risks are below acceptable level • risk areas: • Subsidies • The procurement of goods and services • Granting of special rights (authorizations, licenses etc.) • Collection of taxes, charges etc.

  12. Three product pillars’ strategy of the SAO - Background information - PA • Goal of performance audit: • SAO should contribute to the implementation by the general government of the main principles inherent to modern public administration – economy, efficiency and effectiveness • Performance audits cover planning and budgeting and the availability of high-quality and reliable policy information • Selction of topics is very important

  13. Implementing strategy – Financial audit • To cover MORE money spent • Using work of internal auditors – helping them • Usefulness of spending

  14. Implementing strategy – Operational risk audit • Not many problems • Choosing similar money flows to audit – possibility to copy approach and to compare auditees

  15. Implementing strategy – Performance audit • Planning, budgeting and policy information quality • Focus from management to real life problems • Monitoring teams • Looking for good not bad practice

  16. Implementing strategy – Organisational level • Things to take into account: • Are our audits useful? • Does support or development activity help us to do better audits? • Trying new things at home!

  17. Implementing strategy –recruiting and training • Private auditors • Invest in some “diamonds” • Pilot projects are more effective than courses – ask as much case studies as possible

  18. !!!! • WHAT IS GOOD AUDIT?

  19. New Challenges and Strategy of the Estonian SAO • Thank You!

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