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The Role of Performance Audit in the Efficiency and Effectiveness of Management of Public Finance in the Federation of Bosnia and Herzegovina (FBiH)
Dr.sc.Ibrahim Okanovi, Auditor General Audit Office for the Instittions of FBiH
The authors views expressed in this presentation do not necessarily reflect the views of the United States Agency for International Development or the United States Government
AIM AND PURPOSE OF PERFORMANCE AUDITING COMPARED WITH TRADITIONAL FINANCIAL AUDITING IN BIH Make auditing public Deal with difficult questions Challenge bad practice Initiate change Promote responsibility Assist in prevention of fraud and corruption Serve a democracy and an open society
MODERN SOCIETY REQUIRES MORE THAN TRADITIONAL FORMS OF CONTROL AND AUDITING
Complex structures multi-layer reforms
Conditions and requirements that change rapidly and
PERFORMANCE AUDITING AS A MECHANISM TO MEAUSRE THE SUCCESS OF PUBLIC SECTOR IMPLEMENTATION of development projects; IMPLEMENTTION of economic development strategy; ECONOMY of budget funds investments LACK of efficient mechanism for monitoring of results of the work of the Government. EVALUATION OF EFFICIENCY of implementation of Government regulations( rules, decisions, conclusions) INCONSISTENT implementation of the prescribed procedures for public procurement in BiH
Internal control
Accounts
PUBLIC SECTOR PERFORMANCE AUDITING (BEST VALUE FOR MONEY) Market mechanism and company profit (private sector) Replacement for market mechanism (public sector) Performance auditing - investigative, almost scientific approach to methodology (extensive investigations). Performance auditing-serves for creation of the better than what is available.
SELECTION OF AUDITS WAS MADE AFTER INDICATIONS FROM THE ENVIRONMENT AND POOR RESULTS BY THE GOVERNMENT
Issues of economy, efficiency and effectiveness of government programs or public services, Issues that have negative impact on society, Issues as a consequence of government activities.
Poverty is a social problem. Auditing monitors the government activities such as poverty reduction programs. They can be more or less economic, efficient, and effective.
Partnership for Advancing Reforms in the Economy (PARE)
EFFICIENCY OF RESPONSIBLE INSTITUTIONS IN THE PROCESS OF INCENTIVES TO THE PRIMARY AGRICULTURAL PRODUCTION
Audit conclusions: The system of award of incentives is inefficient and is frequently changing. The system of planning and execution of budget is not timely and does not function efficiently. The existing system of control and audit is not in the function of efficiency nor in the function of incentive process. Audit recommendations: Improve the flow and distribution of information on changes in regulations. Establish a system of a more efficient control and inspections based on risk estimate. Simplify application forms.
TIME MANAGEMENT IN THE PROCESS OF EXPROPRIATION OF REAL ESTATE DURING CONSTRUCTION OF A HIGHWAY
Audit conclusions: Expropriation procedures are neither timely nor efficient. Unsolved ownership issues (no possibility for agreements on transfer of ownership). Lack of transparency and supervision (system development not possible). Audit recommendations: That the user of expropriation follows the information on current prices in the real estate market To ensure fair and realistic offers to land owners when making an agreement on transfer of ownership. That the stakeholders improve mutual exchange of information. That the responsible Ministry ensures that the user of expropriation may solve complex cases, including the issue of ownership. Tat the user of expropriation submits disputed cases to the court.
Determine criteria for award of incentives and appropriate evaluations to enable that the funds are directed to the projects that stimulate the development of SMEs, and insure transparent award of incentives at all stages.
CONCLUSION:
Who has the right, the information, and the capability to oppose bureaucracy, inefficiency, ineffectiveness, and dysfunctional regulations? AUDITORS CAN MAKE CHANGE
Partnership for Advancing Reforms in the Economy (PARE)