Eduardo RUIZ GARCIA Head of division Håkan HELLSTRÖM Principal auditor Vilnius March, 2006

1. European Court of AuditorsExperiencies in implementing Audit Quality • Eduardo RUIZ GARCIA • Head of division • Håkan HELLSTRÖM • Principal auditor • Vilnius March, 2006

2. European Court of Auditors • Supreme Audit Institution of the European Union • Audit the budget of the EU, >100.000 Mio € • “Audit Office type” mandate; no judicial powers • Collegial body; 25 Members • Staff +/- 750 (half auditors) • Financial & Performance Audit • Annual Report, Statement of Assurance; Special Reports; Opinions

3. PRESIDENCY Supervision of the performance of the Court's work, External relations, Legal matters 5 AUDIT GROUPS I Agricultural policies II Structural and internal policies III External actions IV Own resources, banking activities, administrative expenditure, Community institutions and bodies CEAD GROUP Coordination, Evaluation, Assurance, Development, ADAR unit (Audit Development and Reports) ADMINISTRATIVE COMMITTEE (1 Member per Audit Group)Administrative matters requiring Court decision AUDIT COMMITTEE(3 Members and external expert) Court’s internal auditor reports to Audit Committee SECRETARIAT-GENERAL Human Resources, IT and Telecommunications, Finance and Administration, Translation Service, Court’s secretariat

4. ADAR (Audit Development And Reports) • ADAR has a horizontal mandate, to assist the Audit Groups and the Court by: • Developing audit standards/methods/procedures/tools • Providing support to Audit Groups and ensuring that standards, methods and procedures are followed • Ensuring the publication of quality Court reports and opinions in a timely manner • Facilitating liaison with auditees, Budgetary authorities, Commission DGs (notably DG BUDG) and Internal Audit service, COCOBU/Budget Committee of Council, OLAF

5. European Court of Auditors

6. European Court of Auditors

7. New Programming Procedure • Why a new procedure: • - consistent application • - rational decision making • straitforward and “economic” • What the new procedure looks like... • Audit Strategy • setting priorities • organising • allocating resources • Annual Work Programme • permanent/recurrent • selected tasks • allocation of resources • reporting deadlines • PortfolioPotential Audit Tasks • identify tasks • analyse • ranks / priority • alternative proposals

8. New Programming ProcedurePortfolio of Potential Audit Tasks

9. Development of Methodology and Audit Quality Support Development of Performance Audit Manual & Guidelines Audit Quality Support

10. Development of Methodology and Audit Quality Support Development of Performance Audit Manual & Guidelines Product definition Procedures QUALITY Communication Audit Quality Support Documentation

11. Audit Quality Support

12. Court mission statement Court Audit Policies and Standards (CAPS) Performance audit manual Financial audit manual General topics Toolbox:guidelines on methods, studies, software... Literature selected from other sources Development of Methodology

13. Development of Methodology Performance Audit Manual Chapter 1 Framework (part I) Chapter 2 Framework (part II) Chapter 3 Essential Qualities Chapter 4 Planning Chapter 5 Examination Chapter 6 Reporting

14. Development of Methodology

15. Quality Assurance(ex-post verification) • Objectives of the Quality Assurance function: • provide assurance of the quality of the audit work • contribute to improve audit work • Main constrains • standards & experience staff • add value • acceptance & communication • Main outcome • most common findings: documentation, audit trail, supervision, use of resources • integrate results into audit practice

16. ECA Self-Assement & Peer review • Why a Self-Assessment & Peer review • quality • best practice • legitimacy • The procedure • the Common Assessment Framework • Self-Assessment Groups • final report • Action plan to be decide by the Court • Peer-review

17. The CAF Model ENABLERS RESULTS People results People Keyperformance results Strategy &planning Citizen/ CustomerResults Leadership Processes Society results Partnerships & resources INNOVATION AND LEARNING ECA Self-Assement & Peer review

18. Conclusions: some quality hints • Control & supervision is important, but is not the “key” to quality • More rules, standards & instructions are not always the solution; need for guidance & support (acceptance & secure). • [Guidelines on Audit Quality] • Key to Quality: capacity and attitude of the organisation & the staff • Improving quality, twofold strategy: • macro: general and long-term vision • micro: implement concrete improvements in each possible area • Support the organisation & the auditors in adding quality