State Audit Institution Delivered 2018 Activity Report to the National Assembly

22 May 2019.
State Audit Institution Delivered 2018 Activity Report to the National Assembly

State Audit Institution of the Republic of Serbia (SAI) audited 209 entities and determined misstatements and irregularities amounting to 217 billion dinars over the course of audits conducted in 2018. Misstatements in financial statements amounted to 195 billion dinars, that is 90% of overall deficiencies, while irregularities in operations amounted to 22 billion dinars, representing 10% of overall irregularities, said President and Auditor General, Dr. Duško Pejović.

At the press conference organized by SAI regarding presentation of 2018 Activity Report, he emphasized that if state authorities started with training and certification of persons preparing financial statements, many misstatements would have been averted, and condition in the country would have been much better.

In that case, irregularities amounting to 217 billion dinars would have been reduced by 195 billion dinars, Dr. Pejović highlighted.


According to him, when it comes to revenues and receipts, audit revealed that misstated information amounted to 80 billion dinars.

Regarding income and expenses, financial statement audit determined that misstatements amounted to 33.51 billion dinars, while compliance audit revealed irregularities amounting to 1.67 billion dinars.

As he noted, misstatements regarding operating results amounted to 783.22 million dinars.


Total amount of audited contracts, after completion of public procurement procedures, amounted to 25.82 billion dinars Audit revealed that procurement of goods, services and works not executed in compliance with the Law on Public Procurement amounted to 1.82 billion dinars in combined audits, that is 1.32 billion dinars in compliance audits, Dr. Pejović highlighted and added that it amounted to 12.04% of irregularities.


Regarding assuming obligations above approved appropriations, amount of determined irregularities was 1.79 billion dinars.


Half of all irregularities, detected in local government units, relate to assuming obligations above approved appropriations, which is unacceptable and punishable, Dr. Pejovic said.


Regarding financial management and control system, out of 150 audited entities, deficiencies in internal control system were detected at 91 entities, that is 61%, while internal audit has not been appropriately established at 77% of budget funds beneficiary, Dr. Pejović highlighted.


During 2018, SAI published 141 financial statements and compliance audit reports, 58 compliance audit reports, 2 performance audit reports, 20 response reports to the audit report and 215 post-audit reports.

In these reports, SAI issued 2,130 recommendations to audited entities, in order to remove misstatements and irregularities determined during the audit process. Total of 1,792 recommendations were issued in financial statements and compliance audit reports, 306 in compliance audit reports and 32 recommendations in performance audit reports.


Most recommendations were issued where the largest irregularities have been determined, Dr. Pejović said.

Out of 2,518 recommendations issued by SAI to auditees in 2017, 1.842 recommendations were implemented, and/or 73%, Dr. Pejović highlighted.

According to him, certain legislation was amended during 2018, in compliance with recommendations and suggestions stated in audit reports. Among others, amended legislation include Budget System Law, Public Property Law, Law on Pension and Disability Insurance, Local Self-Government Law, Law on Charges for Usage of Public Goods.


During last year, SAI issued recommendations for amending, and/or adopting regulations, namely 16 laws, one decree, five Rulebooks and one decision, Dr. Pejović said.


During 2018, the Institution has filed total of 289 charges against 157 responsible persons, namely 242 requests for initiating misdemeanor proceedings, 26 charges for economic offense and 21 criminal charges. Also, 30 pieces of information were filed to competent prosecutor's offices, Dr. Pejović highlighted.


Speaking on effects of conducted audits, Auditor General explained that, upon measures taken by auditees following SAI recommendations during 2018, financial benefits were achieved amounting to 733.72 million dinars, out of which 253.14 million dinars were related to increase of revenues and 480.58 million dinars to decrease of expenditures. He added that operations were harmonized with legislation by over 2.94 billion dinars, while the property was entered into registers amounting to over 450 billion dinars.


Specifically, regarding measures undertaken in 2018 following the recommendations issued during the audit process in 2018, savings were recorded in costs by 47.4 million dinars, collection of receivables was increased along with revenues by 35.46 million dinars, benefits for citizens were achieved by 2.59 million dinars, and other benefits amounted to 5.88 billion dinars.


In addition, regarding recommendations issued during audits undertaken in 2017, and measures implemented following those recommendations in 2018, savings were recorded in costs by 433.18 million dinars, collection of receivables was increased along with revenues by 218.58 million dinars, benefits for citizens were achieved by 34.85 million dinars, and other benefits amounted to 486.24 billion dinars - which largely include more objective presentation of data in financial statements.