Dr. Pejović: It is Necessary for the City of Sremska Mitrovica to Establish an Internal Audit Function

31 March 2021.
Dr. Pejović: It is Necessary for the City of Sremska Mitrovica to Establish an Internal Audit Function

At today's session of the Committee on Finance, Republic Budget and Control of Public Funds Spending of the National Assembly, the President of the State Audit Institution (SAI) and Auditor General Dr. Dusko Pejovic presented the Report on Audit of Consolidated Financial Statements of the Final Account for 2018 of the City of Sremska Mitrovica.

At the session of the Committee held outside the headquarters of the Assembly, in Sremska Mitrovica, Dr. Pejović emphasized that the implementation of the audit revealed that this City does not have an established system of financial management and control and internal audit.

Considering the size of the budget, as well as the number of direct and indirect budget users, the City of Sremska Mitrovica should establish an internal audit unit in which at least three internal auditors should be employed, said Dr. Pejović.

According to Dr. Pejović, the City of Sremska Mitrovica, in accordance with the Law on Public Property, should intensify activities on recording property owned by the City.

Out of 20 recommendations issued by the State Auditors to the City of Sremska Mitrovica, 18 recommendations have been fulfilled, while the implementation of two recommendations is still in progress. That was the reason why we selected this City to host our session, said Dr. Pejović. He announced that the next audit process regarding the City of Sremska Mitrovica will include, among other things, recommendations implementation of which is underway, as well as the establishment of an internal audit in this City.

At the meeting of the Committee, Dr. Pejović also presented the reports on the audit of entities audited by SAI, which are headquartered in the territory of City of Sremska Mitrovica - Report on the audit of financial statements of PE for distribution of natural gas "Srem-gas" for 2020, Report on audit of financial statements and compliance audit of VPD "Sava" d.o.o. for 2020, Report on the compliance audit of VPD "Hidrosrem", d.o.o. for 2019, as well as the Report on the audit of financial statements of the General Hospital Sremska Mitrovica for 2019.

Speaking about reports on the audit of water management companies (VPD), Dr. Pejović warned that these companies do not conduct public procurement procedure. According to him, out of 22 such companies in Serbia, SAI conducted audits of nine companies, and only two VPDs implemented public procurement procedures. Other VPDs procured and paid for goods and services, but did not conduct any public procurement procedure, they do not have any internal acts, nor did they address the Public Procurement Office, said Dr. Pejović, and added that the audited VPDs spent 265 million dinars without applying the Law on Public Procurement.

During the session of the Committee, a session of the Subcommittee for Reviewing SAI Audit Reports was held, whereat sectoral reports of the State Audit Institution - Sector No. 1 and Sector No. 3 were discussed. The reports were submitted by the Supreme State Auditors Danimir Vulinovic and Snezana Trnjakovic. After considering the reports, upon the proposal of the Subcommittee, the Committee accepted the mentioned Sectoral Reports, and also accepted proposal that conclusions regarding consideration of those reports should be defined at one of the next meetings of the Committee.

At the session of the Committee, the Supreme State Auditor in Sector No. 2, Stojanka Milovanović, presented two performance audits with the topic in the field of agriculture - "Efficiency of Incentives in Animal Husbandry" and "Incentives for Rural Development Measures". That part of the session was also attended by the Chairman of the Committee for Agriculture, Forestry and Water Management, Marijan Risticevic.

The President of the Committee, Dr. Aleksandra Tomić, pointed out that by holding the meetings of the Committee outside its headquarters, the obligations envisaged by the Government's Public Financial Management Reform Program are being fulfilled - that the Committee discusses the SAI reports.

The meeting of the Committee was attended by the Deputy Mayor of Sremska Mitrovica, Petar Samardzic, as well as representatives of the civil sector - Transparency Serbia, Nemanja Nenadic, and the Rural Center "Sova" Gospava Kalaba.

Sessions of the Committee outside the National Assembly are held with the support of the United Nations Development Program (UNDP) and the Swiss Agency for Development and Cooperation (SDC), within the project "Strengthening the oversight role and the Transparency of the National Assembly".