Audits of pre-accession funds in the State Audit Office of the Republic of Latvia 2000/2001

Uldis Kremers

Auditor of the Audit Department of the State Economic Activities

SAI of Latvia

What principal audits of pre-accession funds the State Audit Office of the Republic of Latvia has performed in 2000/2001?

What new rules there have been to observe? What has been new in the method? What the key findings of these audits are? What is the co-operation with the European

Court of Auditors? The State Audit Office as the SAPARD Certifying

body in future?

2000

Audit on the PHARE financed agriculture and rural development projects in Latvia 1997-1999

Audit on the PHARE financial assistance received by the SMEs’ support centres in Latvia 1993-2000

2001

New type of audits introduced: audits of PHARE financed projects on the basis of their implementation accordingly the DIS Manual

Projects audited in the Ministry of Economy (PHARE 1997 programme): “Technical Assistance to the Energy Accession Support

Programme” “Implementation of the Energy Emergency Management

System” “Renewable Energy Programme” “Establishment of the State Energy Inspection”

2001

Projects audited in the Ministry of Transport (PHARE 1997 and 1998 programmes): “Continuation of Via Baltica Support: Technical Assistance

in Performing the Feasibility Study for new Crossing of River Daugava in Riga City”

“Navigation Aids in Small Ports: Supply of Harbour Lights, Leading Lights to Small Latvian Ports”

“Supply and Installation of Navigation Aids at Small Ports Follow-on Project”

“Technical Assistance to the Ministry of Transport” “Supply of Rails for Latvian Railways Rehabilitation of

East – West Corridor” “Modernisation of Latvian Railways Rail Welding Workshop

in Riga, Supply and Installation of Equipment”

2001

New audit started in co-operation with the European Court of Auditors: “Commission Aid to the Environment Sector in the

Candidate Countries 1995-2000”

National law National contractual obligations with the

European Communities

Council Regulation No. 3906/89 of 18 December 1989 on Economic Aid to certain Countries of Central and Eastern Europe

Council Regulation No. 1231/77 of 21 December 1977 applicable to the General Budget of the European Communities

Framework Agreement between the European Commission and the PHARE partner country

Memorandum of Understanding on the Establishment of the National Fund

Financing Memoranda

DIS

Decentralised Implementation System = legal and administrative framework for the transfer of responsibilities from the European Commission to the partner countries

Stages in Commission’s financed programmes’ implementation: country programming detail programme preparation: strategic plan/work programme detailed project preparation: project identification/design

(Terms of Reference) projects’ implementation: tendering, contracting,

contractor’s action, supervision, performance of payments follow-up/supervision: monitoring, assessment, evaluation, audit

Actors: European Commission, National Technical Aid Coordinator, National Authorising Officer, Treasury (National Fund), Programme Authorising Officers, Finance and Contracting Units, Sector Authorising Officers, line ministries, final beneficiaries, Internal Audit Services, European Court of Auditors and national supreme audit institution

Preliminary study Audit task and Audit plan Audit Audit report Replies from institutions Decision of the Department’s Collegium

Introduction of the PHARE financed projects’ Decentralised Implementation System ensures now a thorough data storage at the national

authorities better accountancy of assistance more supervision of the projects’

performance

The objective of the audit is to assess whether Commission aid in the candidate countries has been well managed and to determine whether it has made an effective contribution to preparing them for accession. 7 PHARE and 1 ISPA projects – the task for the

team of the State Audit Office 9 PHARE and 2 ISPA projects – the task for the

team of the European Court of Auditors

New accents:

Transfer of ECA’s methodology  Audit = Training  New ideas in drawing up working documents  Good definition of risks = Key to detect

problems Audit of a wide range co-financing as well  Economy of audit costs

Main audit issues: Projects’ implementation in the framework of

Commission’s and national strategies Capacity of the financed infrastructure Neighbouring towns Assessment of the feasibility studies performed Competition level at the tender, tendering

procedures Time schedule of the project Assessment of the financial management, use of

funds Co-ordination with the national co-financing and

other donors Effectiveness of the project outcomes

Competent authority = Ministry of Finance Current SAPARD Certifying body = audit

company “Arthur Andersen” State Audit Office = expected Certifying body

in future Revision of the law = draft law at the

Parliament Training