THE MINISTRY OF FINANCE AND THE PARLIAMENTARY AUDIT COMMITTEE: TOWARDS PARTNERSHIP Rimantas ŠADŽIUS Viceminister of the MoF, Lithuania 17 October, 2006

2 KEY PARTNERS  The Lithuanian National Audit Office (LNAO) – State Control  External audit  The Parliamentary Audit Committee (PAC)  Parliamentary supervision  The Ministry of Finance  Central guidance on internal audit, budgeting

3 Areas of mutual interest: Objectives of the LNAO – External (performance and financial) audits on State budget implementation and use of State funds External (performance and financial) audits on State budget implementation and use of State funds Reporting on the results of the external audit to the PAC Reporting on the results of the external audit to the PAC Submitting annually to the Parliament opinion on the account of the execution of the State budget and opinion on the report on the state- owned property Submitting annually to the Parliament opinion on the account of the execution of the State budget and opinion on the report on the state- owned property

4 Areas of mutual interest: Objectives of the PAC – Consideration of reports of the LNAO Consideration of reports of the LNAO Consideration of the annual reports of the Ministry of Finance (on budget execution and internal audit functioning) Consideration of the annual reports of the Ministry of Finance (on budget execution and internal audit functioning) Providing recommendations for the reports Providing recommendations for the reports

5 Areas of mutual interest – Objectives of the Min of Finance Implementation of the PAC recommendations on internal audit and budgetary system developments Implementation of the PAC recommendations on internal audit and budgetary system developments Annual reporting on budget execution Annual reporting on budget execution Setting standards for financial reporting and accounting; Setting standards for financial reporting and accounting; Annual reporting on functioning of the internal audit system Annual reporting on functioning of the internal audit system Setting standards for internal audit and financial control systems; Setting standards for internal audit and financial control systems;

6 The State of Play More than 100 financial and 48 performance audits by the LNAO (in 2005) More than 100 financial and 48 performance audits by the LNAO (in 2005) Consideration at the PAC of the 36 audit reports (2005) Consideration at the PAC of the 36 audit reports (2005) Internal audits : 42% performace, 22% financial audits (in 2005) Internal audits : 42% performace, 22% financial audits (in 2005) Consideration at the PAC of the Annual report on functioning of the internal audit (presented by Ministry of Finance) Consideration at the PAC of the Annual report on functioning of the internal audit (presented by Ministry of Finance)

7 Partnership Development Trends Internal and External audit co-ordination Providing guidance in response to the identified systematic weaknesses Providing guidance in response to the identified systematic weaknesses Coordination of the PAC proposals for internal audit, budgeting system developments Clear position and role of the participation at the PAC of the Ministry of Finance Mutual confidence and respect

8 Partnership Benefits Coordinated internal audit and external audit activities Successful implementation of accepted LNAO and PAC recommendations Better quality of financial control and of the public financial system performance

9 Conclusion Despite different roles, partnership will help the MoF, the LNAO and the PAC to achieve their objectives and will provide more effective, efficient and transparent financial management