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SUPREME AUDIT OFFICE CZECH REPUBLIC

SUPREME AUDIT OFFICE CZECH REPUBLIC REPORT FROM DISCUSSION GROUP 3 AUDIT ISSUES FOR PUBLIC PRIVATE PARTNERSHIP VI EUROSAI Training Event Better Auditing of Public Aids and Subsidies Prague, 6-8 November.

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SUPREME AUDIT OFFICE CZECH REPUBLIC

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  1. SUPREME AUDIT OFFICECZECH REPUBLIC REPORT FROM DISCUSSION GROUP 3AUDIT ISSUES FOR PUBLIC PRIVATE PARTNERSHIP VI EUROSAI Training EventBetter Auditing of Public Aids and SubsidiesPrague, 6-8 November

  2. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 2 Leadership of Discussion Group:National Audit Office (Richard Wade)Presentations and case studies:Netherlands Court of Audit (Harry Kramer) State Audit Office of Hungary (Gusztáv Báger)Alsace Accounting Chamber (Jean François Forestier)

  3. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 3 Netherlands Court of Audit (Harry Kramer) • Introduction into PPP in Netherlands • High Speed Train project from Rotterdam to Belgium – why this project? • Public Sector Comparator and Public Private comparator issues • Audit findings • Very hard to stop the PPP process

  4. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 4 Netherlands Court of Audit (Harry Kramer) Conclusions: • If decision is meant to have a financial basis – the calculation should be checked • If decision is made on policy grounds – the implementation should be checked • A look at risk allocation recommended

  5. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 5 State Audit Office of Hungary (Gusztáv Báger) • Informed on general situation of PPP in H. • 4 major groups of projects (road infrastructure, large sport facility projects, educational/cultural investments, prisons • Problems identified – risk allocation, contracting, financing

  6. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 6 State Audit Office of Hungary (Gusztáv Báger) Some of recommendations: • Need to balance short term savings in publicly funded investment with long term efficiency • Need for capacity building (applies to more countries) • Guidelines for planning ahead • The impact of PPP (cap at 2% annual budget expenditure)

  7. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 7 Alsace Accounting Chamber (Jean François Forestier) Presentation on Water Provision Management Audits General information: • almost 37 thousand communes (often very small on population) • Various types of management – private or run by communes • Communes are audited every 4 to 6 years and water provision contracts are always included • Presentation gave overview on audit procedures, control of contract‘s provisions, execution and final recommendation Some of key findings: • Unbalanced contract negotiations with big contractors from the start • Unadjusted revision provisions • Private sector looking for demand risk „upside“ only with protection from any fall in water consumption • Special fees paid by companies

  8. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 8 Alsace Accounting Chamber (Jean François Forestier) Some of key findings (continued): • Undue direct costs - scope of work not always relevant to the paying water consumer • Unallocated costs • Replacement costs – inadequate maintenance and renewal – leading to unjustified profits Recommendations: • Amend contracts (audit every 4-6 years in average 12 year contract) • Start right (inventory of water service first, performance indicators)

  9. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 9 Shortly on key note presentations from morning sessions:National Audit Office (Richard Wade) PPP Centrum Czech Republic (Libor Cupal)

  10. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 10 National Audit Office (Richard Wade) • UK experience to date • Major audit issues – financial and performance • The dangers of off balance sheet accounting • A comprehensive audit approach

  11. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 11 PPP Centrum Czech Republic (Libor Cupal) • Market development summary • Standard Project Agreement • Pilot projects • Framework / institutional capacity • Control process • Conclusions : be realistic, be pragmatic, look for best practice, diversified focus important, systematic approach

  12. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 12 Conclusions PPP audit can have real impact!!! • Netherlands – reexamination of model • France- recommendations to protect local communities from unbalanced contracts • Hungary – budget planning for the extent of PPP • UK – influence on government guidance • Czech Rep. – a central body to provide expertise before audit starts

  13. VI EUROSAI Training Event: Better Auditing of Public Aids and Subsidies 6-8 November 2006 13 Thank you for your attention Radek Majer radek.majer@nku.cz www.nku.cz

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