January 2012single audit Netherlands Court of Audit1
The Netherlands Court of Audit
Audit approachAudit approach
System based approachSystem based approach
&&
Single auditSingle auditTon Kok
Netherlands Court of Audit
January 2012single audit Netherlands Court of Audit2
Content
• Audit environment
• Audit approach NCA
• Definition Single Audit
• Conditions using single audit
• Single Information and Single Audit (SISA)
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Audit environment
Governmental levels Audit Mandate and Scope NCA
State level(21 budget chapters)
12 Ministers + 8 Assistant Secretary
Central Government+
-Legal entities with statutory duties (quangos)-State subsidized organisations-Recipients of EU subsidies
Provincial level (12) Not local governments
Municipal level (431)
Constitution and ‘comptabiliteitswet’ -> powers, checks and balances, requirements for financial management etc.
Dutch governance system
Parliament
Policy directorates
Central Directorate for Financial & Economic Affairs (internal control)
Secretary General (Audit Committee)
Minister
Internal Audit Department
Court of Audit
Beneficiaries- local government- care and health- education- industry
External private Audit
ReportAudit opinion
ReportAudit opinion
ReportAudit opinion
Au
dit chain
Financial management
Internal control (supervision)
Accountability report
Accountability report
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January 2012single audit Netherlands Court of Audit5
Definition Single Audit
• No clear international accepted definition
• In general it is a name which covers a way
of thinking about a situation where one
entity is subject to many audits or the
entity has already been audited by an
other auditor
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I Reliance on the work of others
A. Review of the audit departments' audit work
1. review of audit files2. interviews/consultation3. reperformance
II Additional audit work by the Court of Audit
B. Systems-basedC. Substantive
Audit activities (single audit)
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Standards used
A. International standards on auditing
• 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information;
• 600-699 Using Work of Others | 610 Using the Work of an internal auditor; 620 Using the Work of an auditor’s expert
• 100-999 Assurance Engagements to audit historical financial information.
B. International Standards of Supreme Audit Institutions
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Internal Audit Department
Planning
Execution
Evaluation/ reporting
I
II
+
III
International Standards on Auditing (IFAC)
Capacity auditors (Certified Public Auditors)
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Review Internal Audit Department
Organisation and planning:
• Capacity (quality and quantity)?
• Are norms specified?
– Materiality?
– When is a transaction regular or not?
• Are recent developments taken into account?
• Is risk analysis performed well?
• Are enough tests of control and substantive tests planned?
I
Plan
nin
g's p
ha
se
January 2012single audit Netherlands Court of Audit10
Review Internal Audit Department
Execution:
• Is the audit performed well (material audit, right
norms, right selection of audit objects, etc)
• Is the audit performed according to plan?
Reporting:
• Are all findings taken into account? (closing
documents)
• Quality evaluation
II+III
Execu
tion a
nd re
portin
g ph
ase
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Reports NCA (single audit)
Accountability Day (each year in May)
In 2011 we published our:
State of Central Government Accounts
+
28 reports (for each budget chapter of 2010)
+
Report on the Dutch EU meber state declaration 2010
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Single Information and Single AuditWhy?
• Developed with regard to grants given from central to local government
• Many grants from different ministries with specific provisions
• Many accountability and audit reports
Solution
• Single information + Single audit
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From multiple to single accountability
Cultuur-bereik
Cultuur-bereik
Acc. verklaring
Acc. verklaring
Bestrijding rampen
Bestrijding rampen
Acc. verklaring
Acc. verklaring
Verkeer en vervoer
Verkeer en vervoer
Acc. verklaring
Acc. verklaringHeroïne
verstrekking
Heroïneverstrekking
Acc. verklaring
Acc. verklaring
Externe Veiligheid
Externe Veiligheid
Acc. verklaring
Acc. verklaring
Stads-economie
Stads-economie
Acc. verklaring
Acc. verklaring
WWBWWB
Acc. verklaring
Acc. verklaring
JaarrekeningJaarrekening
Acc. verklaring
Acc. verklaring
One accountability report for all stakeholders
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Single audit• Annual (financial) report and audit is leading
• No longer for each specific grant a separate audit (protocol)
• Reference and standards for local auditor
– General auditing standards
– Requirements for all specific grants in a note for the auditor
– Regulation of specific grants
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Single review• Auditor of local government covers all
specific grants in his annual audit activities
• Also on central state level the auditors of
the ministries are working together
• One review team reviews and verifies the
quality of the locally performed audits for
different ministries (selection based upon
risk-analyses and sampling)
January 2012single audit Netherlands Court of Audit16 25-27 October 2010CAP 2010 Experiences in the Netherlands16
Pro and contra Single audit PRO
• Systematic control and audit
• Asks for adequate system and management
• Less audit burden
• Less resources
CONTRA
• Only paper
• Chain is as strong as weakest connection
• No statistical underpinned statement
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Questions?
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Developments• Result of New Public Management
• ‘in control statements by minister,
including regularity’
• Non financial information (VBTB)
• Centralisation of internal audit departments
• Financial crisis
Policy (VBTB) Budget• Goal: make budgetary process more policy-
oriented. Three questions (known in the
Netherlands as the www-questions):
• What do we want to achieve?
• What will we do to achieve it?
• What will be the costs of our efforts?
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Policy (VBTB) Annual report• After budgetary year, the governments
national annual report will have to answer
the logical equivalents to these three
questions:
• Have we achieved what we intended?
• Have we done what we should have done
in achieving it?
• Was the cost what we had expected?January 2012single audit Netherlands Court of Audit20