Announcement - 22nd September 2014
Visit to the Swiss Parliament regarding Project Titled "Strengthening of Oversight Function and Transparency of the National Assembly of the Republic of Serbia"
President of the State Audit Institution, Mr. Radoslav Sretenovic, together with the delegation of the National Assembly of the Republic of Serbia, attended a study visit to Switzerland, where he was acquainted with the manner of control over public spending, exercised by the Swiss Parliament.
In addition to meeting with members of the both houses of the Swiss Parliament, the Serbian delegation also met and exchanged experiences with the State Secretary in the Ministry of Foreign Affairs, Auditor-General of Switzerland, Ministry of Finance, Inter-Ministerial Working Group for Fight Against Corruption.
Switzerland, as a federal state with rather unique political institutions and direct democracy mechanisms, influences the work and role of the Parliament, as well as forms of public finance management. Delegation had the opportunity to see three levels of management: municipal, cantonal and federal, via both houses of the Parliament.
A special forum was organized on parliamentary issues, attended by the MPs of both houses and members of academic circles involved in political sciences. The forum was also attended by the Swiss journalists that covered the visit.
Delegation was greeted by the Vice-President of the lower house of the Parliament, Ms. Christa Markwalder, and national flag of the Republic of Serbia was erected on the building of the Swiss Parliament on that occasion.
Besides Mr. Sretenovic, the delegation included MPs, namely: Veroljub Arsic, Janko Veselinovic, Marija Obradovic, Olgica Batic and Dubravka Filipovski, along with Secretary General and Assistant to the Secretary General of the National Assembly, Jana Ljubicic and Mirjana Nedeljkovic.
Visit and exchange of experiences, marking the beginning of the cooperation between the two parliaments and further work on strengthening parliamentary oversight, was organized within the project titled "Strengthening of Oversight Function and Transparency of the National Assembly of the Republic of Serbia", implemented by the National Assembly and the United Nations Development Program (UNDP), supported by the Swiss Agency for Development and Cooperation.
Announcement - 16th April 2014
Company Vehicles Recorded Mileage of More Than 67 Million Kilometers in 2012
"There is a risk that direct budget beneficiaries do not manage company vehicles economically and efficiently", Mr. Radoslav Sretenovic said, President of the State Audit Institution. During presentation of the Performance Audit Report titled "Management of Company Vehicles of Direct Budget Beneficiaries of the Republic of Serbia, Mr. Sretenovic highlighted that, based on the data acquired for 2012, there are total of 26,966 company vehicles in the Republic of Serbia which are managed by direct budget beneficiaries. Out of that number, 6,244 are general purpose vehicles, while 20,722 are special purpose vehicles.
In 2012, expenditures and expenses for the stated vehicles amounted to 6.1 billion dinars, out of which 1.9 billion dinars were expenditures and expenses for general purpose vehicles, and 4.2 billion dinars were expenditures and expenses for special purpose vehicles, Mr. Sretenovic emphasized.
General purpose vehicles, making less that one quarter of the total number of vehicles, result in one third of the total expenditures and expenses. In the structure of expenses, the largest portion is the fuel with 929 million dinars, and/or 60%, and current maintenance and repairs with 318 million dinars, and/or 20%.
Since 31st December 2012, general purpose company vehicles recorded mileage of more than 590 million kilometers, while in 2012, their total mileage was more than 67 million kilometers, and/or 12,000 km per vehicle on average. The mileage of direct budget beneficiaries' vehicles ranges from 0 to 100,000 km, and 643 vehicles were not used in 2012, Mr. Sretenovic said.
The largest number of vehicles with no mileage at all in 2012 was owned by the Tax Administration - 191 vehicles, Republic Geodetic Authority - 101 vehicles, and Ministry of Foreign and Internal Trade and Telecommunications - 71 vehicles.
Average age of general purpose vehicles is 9.5 years, while average fuel consumption per vehicle is 9.78 liters per 100km.
Auditor-General stated that the Institution filed one criminal charge, due to criminal offense of abuse.
Criminal charge was filed against a person, who created budget loss of 1.2 million dinars, Mr. Sretenovic said.
Due to investigation launched after filing criminal charge, Mr. Sretenovic could not reveal the name of the state institution.
As an example of good practice and management of company vehicles in a prescribed manner and purpose, Mr. Sretenovic highlighted the Ministry of Defense.
Detailed analysis determined that one of the main reasons for non-efficient management is that the management of company general-purpose vehicles of direct budget beneficiaries in Serbia is not regulated by the law, and that the records of direct budget beneficiaries do not provide current and comprehensive data on number of company vehicles, their usage and expenses and expenditures.
Also, direct budget beneficiaries did not establish adequate systems for monitoring and controlling company vehicles, while acquisition and sale of company vehicles is conducted without prior essential analyses. Majority of beneficiaries have a partial information gathering system and records on using company vehicles.
In order to regulate usage of company vehicles, the Institution recommended the Government of Serbia to undertake activities for defining via enactments management of company vehicles, and recommended direct budget beneficiaries to prescribe, vial internal enactments, all necessary procedures regarding using company vehicles, to review the possibility of rationalization of their own pool of vehicles, and to record all expenditures and expenses broken down per vehicle, along with all data on mileage and usage of the vehicles.
Audit included management of company vehicles of direct budget beneficiaries of the Republic of Serbia (Government, Government offices and services, ministries, organizations, administrations and directorates within the ministries). Other budget funds beneficiaries (indirect budget fund beneficiaries of the Republic of Serbia's Budget, public enterprises and other levels of government - autonomous provinces and local self-government units) have not been included, due to limited resources and time.
From 126 direct budget beneficiaries, the Institution gathered information on number of vehicles used, when they were acquired, their acquisition cost and their present value, mileage of vehicles since the acquisition date until 31st December 2012, their mileage in 2012, ownership information, legal basis for usage, average fuel consumption, expenses for fuel, maintenance, spare parts, registration, insurance and parking.
For the purposes of this audit, management of company general-purpose vehicles was analyzed, while management of special purpose vehicles (police and military vehicles) was not subject of the detailed analysis.
Having analyzed general information and based on established and clearly defined benchmarks, the State Audit Institution selected 15 out of 126 direct budget beneficiaries for detailed analysis. Selected direct budget beneficiaries manage 88% of total number of vehicles and 84% of total expenses of the vehicles.
Afterwards, the Institution developed draft audit report and subsequently proposal and final audit report, which was submitted to the addresses of 15 direct budget beneficiaries, and/or to responsible and previously responsible persons.
This is the first performance audit report prepared by the State Audit Institution.
Audit has been conducted as a pilot audit within the Twinning Project "Strengthening Capacities of the State Audit Institution", which is implemented by the Netherlands Court of Audit and Office of the Auditor General of the United Kingdom.
Announcement - 26th June 2014
Lack of Efficiency in Public Funds Management at the Level of Local Authorities
Local self-governments and territorial autonomies do not manage public funds efficiently, make payments with no legal basis, have not established internal audit, rent out business premises in a corruptive manner and do not implement international standards in their operations. Those were some of the conclusions contained in the "Analysis of the Past Reports of the State Audit Institution, regarding work of the local government units and territorial autonomies". The Analysis was presented at the conference "Improvement of Public Finance Management at the Local Level". The event, attended by mayors, presidents of municipalities and representatives of the relevant state institutions, Mr. Radoslav Sretenovic, President of the State Audit Institution, said that numerous irregularities, issued audit opinions and filed charges indicate that the operation of local authorities is very difficult issue, complex and burdened with problems. He added that the key problems are reflected in insufficient efficiency of public funds' usage, inefficient public property management, insufficient observation of laws, regulations and procedures, which clearly indicate lack of public responsibility.
"It has been noticed that a large portion of public revenues is collected on other basis, thus precluding them to be spent for budgetary purposes", Mr. Sretenovic said.
"We have also proposed changes to certain regulations. For instance, law should be adopted on work relations and on salaries in local governments, as well as on subsidies", Auditor-General highlighted. He said that it was of particular importance that the mayors and presidents of municipalities understand the essence and importance of irregularities for which they are mostly responsible, for they issue orders for budget execution.
Vice-President of the Government of the Republic of Serbia and Minister of State Administration and Local Government, Ms Kori Udovicki, emphasized that the source of financial indiscipline and debt is the government itself. According to her, the root of the problem is the lack of compulsory planning system, lack of coordination, and lack of supervision over what we do.
"At the level of local government units, these problems are considerably more complex due to inconsistency of competences, priorities and capacities", Ms Udovicki said.
"In the Autumn, a variety of laws will be adopted, regulating work in public administration, particularly important issue will be to comprehensively regulate salaries in the public administration, agencies, public services and local government", Ms Udovicki said.
Finance Minister, Mr. Lazar Krstic, expects that by the end of July a draft law on local government financing will be finished and that such law will be adopted in September or October.
"When the law is adopted, municipalities will be able to plan the next-year budget", Mr. Krstic emphasized. He added that this law would introduce clear rules and predictability in allocation of revenues, so that each municipality, based on the parameters, will know the size of the Government transfer funds on which it can count.
According to him, it is very important to adopt such law, because one eight of total government revenues is collected at the level of local governments.
"Manner of financing various levels of government is one of the five priorities of the Finance Ministry", he emphasized.
President of SCTM and Mayor of the City of nis, Mr. Zoran Perisic, said that attitude to the public property must be changed.
In Nis, total of 6,500 facilities were constructed in the period between adoption of two legalization laws. Therefore, City Budget is deprived of two annual budgets, Mr. Perisic explained.
Jürg Staudenmann, Deputy Resident Representative of the United Nations Development Program, emphasized that the introduction of the programing budget, along with adoption of the law on local government financing, are the possibilities to strengthen public funds management.
He said that UNDP will continue, during this and next year, to cooperate with Serbia's institutions, in order to improve conditions at central and local level of authorities.
Mr. Duško Pejović, Supreme State Auditor of the Sector for Audit of Local Authorities' Budgets highlighted that at the level of local authorities, operations have not been defined through internal enactments, risk management strategy was nod developed, control activities have not been properly established, nor has internal audit been established, while revenues and receipts have been planned in unrealistic manner.
As examples of poor public funds management at local level, he gave example of a municipality with level of indebtedness equaling two annual budgets, and the municipality whose account has been frozen for 265 days.
Mr. Nebojsa Lazarevic, expert consultant, who participated in development of the Analysis, pointed to the most important conclusions included into the Analysis.
Mr. Djordje Staničić,Secretary General of the Standing Conference of Towns and Municipalities addressed the participants.
State Audit Institution has published the total of 59 audit reports so far. Audit of annual financial statements of the budget and compliance audit of AP Vojvodina were conducted, along with audits of 23 cities, 31 municipalities and 4 city municipalities. Currently, audit is conducted at 27 local authorities, out of which 20 audits relate to municipalities, and 7 to city municipalities. In the previous three years, the Institution issued 1,034 recommendations, out of which 607 were implemented, 342 are currently being implemented, 9 recommendations were not implemented and regarding 76 recommendations audits of responses to the audit report will be implemented in 2014. Largest number of recommendations, 44% of them, was issued in the area of expenses and expenditures, 11% regarding balance sheet, 10% regarding financial management system etc. So far, the Institution has filed total of 343 requests for initiating misdemeanor proceedings against local authorities, 32 charges for economic offense and 65 criminal charges.
Moderators at the event were Ms Iva Vasilic, Head of the Office of the President of the State Audit Institution, Mr. Nebojsa Lazarevic, Consultant for development of the Analysis, and Mr. Aleksandar Bucic, Assistant Secretary General of the Standing Conference of Towns.
The conference was organized by the Standing Conference of Towns and Municipalities, within activities of the Project "Advancing Accountability Mechanisms in the Public Finances', implemented by the United Nations Development Program (UNDP) in cooperation with the State Audit Institution, which is funded by the Swedish International Development Cooperation Agency (SIDA).
Announcement - June 6th 2014
Members of Parliament Endorsed the Report on Operations of
the State Audit Institution for 2013
MPs of the National Assembly of the Republic of Serbia discussed yesterday the Report on Operations of the State Audit Institution for 2013. With majority votes of all Members of Parliament, the National Assembly adopted Proposal of the Conclusion of the Committee for Finance, Republic Budget and Control of Public Funds' Spending, regarding review of the Report on Operations of the State Audit Institution for 2013.
Presenting the report, Mr. Radoslav Sretenović, the President of the State Audit Institution, emphasized that in 2013 the Institution fully realized its planned tasks.
State Audit Institution audited financial statements and conducted compliance audit of 56 entities. However, we audited financial statements and conducted compliance audit of 56 entities, because we also audited specific elements of financial statements within audit of the Final Statement of Accounts of the 2012 Budget of the Republic of Serbia, Sretenović emphasized. He also added that audit process in 2013 covered public expenditures and expenses totaling 2,683 billion dinars.
During the plenary address, the Auditor-General pointed to the most significant irregularities found at auditees, pertaining to the Budget System Law, Public Procurement Law, Labor Law, inventory of assets and liabilities, balance sheet, receivables and obligations, salary expenses and employee benefits.
We have also delivered 1081 recommendations to the audited entities, Mr. Sretenović highlighted. He added that the State Audit Institution, based on the information acquired by state auditors during the audit process, would file initiatives for adoption of new laws or amendments to applicable laws.
The Institution will issue recommendations for amendments to the Budget System Law, amendments to the Law on Salaries of Members of Parliament in the National Assembly of the Republic of Serbia, amendments to the Pension and Disability Insurance Law, amendments to the Health Insurance Law, adoption of the Health Protection Law, Law on Health Insurance of Military Insured Persons, Labor Law and Law on Salaries in Local Government Units, Law on Communal Charges and Law on Subsidies, Mr. Sretenović said.
The Institution filed 208 requests for initiating misdemeanor proceedings, along with 18 charges for economic offense and 51 criminal charges.
In order to increase number of audit reports, as well as to expand the scope of audit and funds subject to audit, it is necessary to hire new staff, Mr. Sretenović said. According to him, increasing number of employees means hiring staff for conducting audit of financial statements of political parties.
Speaking on business premises, Mr. Sretenović reiterated that the Institution uses business premises in Niš, Novi Sad, Belgrade and Kragujevac.
In Belgrade, the Institution uses offices in five separate locations. That poses a communication problem among the employees and increases overall operating costs. Such situation has not jeopardized audit program execution, but it has put additional strain on audit teams. In cooperation with the Government, the Institution has taken measures and activities on finding adequate and integral business premises, Mr. Sretenović said.
In its past work, the State Audit Institution has aspired to justify the trust that the National Assembly has displayed by providing support in parliamentary oversight over public funds spending. We shall continue to do so in the future, Mr. Sretenović said.