1. 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

2. 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?

3.  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

4.  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”

5.  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”

6.  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”

7. National law National contractual obligations with the European Communities

8. 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

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

10. 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

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

12. 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

13. 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

14. 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

15. 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

16. 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