|
||||||||||||
|
||||||||||||
|
State Audit Law - "Official Gazette of the Republic of Macedonia"
65/ December 22/1997
Amendment Law to the State Audit Law - "Official Gazette of the R. M." 70/
September 5, 2001;31/May 5, 2003 and No. 19.March 30, 2004
This Law sets forth the conditions and the methods of conducting a state audit of the Budget of the Republic of Macedonia, the budgets of the units of the local self-government, the budgets of the Funds (as used further in this text: the budgets), budget funds beneficiaries and their unit beneficiaries, state-owned enterprises, the National Bank of the Republic of Macedonia, legal entities in which the state is the major shareholder, political parties funded by the budget, agencies and other institutions established by law, other organizations financed by public funds, and the beneficiaries of European Union funds and other international organizations.
A state audit, in terms of this Law, represents examination of documents, papers and reports on performed internal controls and internal audits, accounting and financial procedures and other records assessing whether the financial reports present truthfully and fairly the financial positions and the results of the financial activities, in accordance with the adopted accounting policies and accounting standards and the International Auditing Standards of INTOSAI.
The state audit also represents the procedure of examining the financial transactions, which involve government expenditures, regarding their legal and authorized spending.
The state audit also includes an assessment to what extent funds are spent economically, efficiently and effectively.
Economy means minimizing of expenses for implementation of some function or activity.
Efficiency means the lowest possible level of expenses with respect to the effects achieved.
Effectiveness means the highest possible level of accomplishment of the program tasks.
"Government expenditures", as specified in this Law, include all the operational and capital expenditures funded by the budgets.
"Government bodies", as used in this Law, means all the bodies of the government, other administrative bodies, organizations and institutions.
The state audit, shall be performed in accordance with the schedule set out in the Annual Program of the State Audit Office, and shall be mandatory at least once a year for: the budgets, the beneficiaries of the Budget of the Republic of Macedonia and the budgets of the units of the local-self government, the state-owned enterprises founded by the Republic of Macedonia and the political parties funded by the budget.
State audit of the other entities identified in Article 1 of this Law shall be conducted in accordance with the Annual Program of the State Audit Office.
The audited entity's annual financial statements and work reports identified in Article 6 paragraph 1 of this Law, shall be reviewed and approved by the competent authorities along with the audit report prepared by the State Audit Office.
The State Audit Office when necessary shall conduct audits as specified in Article 2, paragraph 2 and Article 3 of this Law.
The State Audit Office in its Annual Program defines the extent of the audit work.
When planning the audits included in the Annual Program, the State Audit Office shall take into account the potential risk of the entities identified in Article 6 of this Law.
The State Audit Office shall perform the state audit tasks.
The State Audit Office shall be a body of the Republic of Macedonia, in the capacity of legal entity.
The headquarters of the State Audit Office shall be in Skopje.
The State Audit Office performs the following tasks:
1) Plans and conducts audits in compliance with Article 2, paragraph 1 of this Law;
2) Conducts audits in compliance with Article 2, paragraph 2 and Article 3 of this Law, according to its Annual Program; and
3) Submitting an Annual Report on the Conducted Audits and its Operations
4) Submitting up-to-date audit reports which containing findings of material irregularities;
5) Submitting a quarterly reports containing monitoring and performance indicators used to determine to what extent the work program has been followed, and this report shall be an integral part of the Annual Report;
The Annual Report on the Conducted Audits shall include:
- information on the implementation of all material recommendations outstanding from the current and previous audit reports issued to the audited entity, assessing the progress in their implementation until such time as they have been satisfactorily completed;
- report on the systematic weaknesses identified in the internal controls and internal audit documents and reports, during the conduct of the audits identified in Article 2 and 3 of this Law, including the State Audit Office's recommendations for improvements and
- report on all material instances of corruption reported to the State Anti-Corruption Commission or other competent authorities.
The report identified in Article 11 item 3 of this Law shall be submitted to the Parliament of the Republic of Macedonia no later than seven months after the expiration from the annual financial statements submission deadline.
The reports as specified in Article 11, item 4 of this Law, may be submitted to the Parliament of the Republic of Macedonia, prior to the submission of the Annual Report on the Conducted Audits.
The General State Auditor shall promulgate all reports identified in Article 11 item 3 of this Law on the WEB-site of the State Audit Office, within 14 days of their submission to the Parliament of the Republic of Macedonia.
The General State Auditor shall promulgate the final audit reports and the written decisions on the complaints against the final audit reports in the Bulletin (publication), within 30 days of their submission to the Parliament.
The General State Auditor when necessary shall hold press conferences or otherwise communicate with the media in order to inform the public about the work of the State Audit Office and the results of the performed audits identified in Article 11 of this Law.
The General State Auditor shall manage the State Audit Office.
The General State Auditor shall have a Deputy.
The General State Auditor and his Deputy shall be appointed for a term of 10 years.
The General State Auditor and his Deputy shall be appointed and removed by the
Parliament of the Republic of Macedonia.
The General State Auditor and his Deputy shall be removed:
The General State Auditor and his Deputy may not hold any other public office, post, nor can they be members of a political party, member of a Board of Directors, supervising committee or any other body of another legal entity.
The General State Auditor shall appoint authorized state auditors who shall manage different departments of the State Audit Office.
The organizational structure of the State Audit Office and the number of staff shall be specified by State Audit Office internal regulations (organizational structure) and personnel policies (position descriptions), approved by the General State Auditor.
The audit of the State Audit Office shall be performed by an audit organization in accordance with Article 2 and 3 of this Law.
The audit report shall be submitted to the State Audit Office and the Parliament of the Republic of Macedonia.
The report specified in paragraph 4 of this Article shall be reviewed by the Parliament of the Republic of Macedonia along with the Annual Report on the Conducted Audits and the Operations of the State Audit Office.
Official IDs shall be issued to the authorized state auditors.
The format, content and issue and withdrawal of the official IDs shall be prescribed by the General State Auditor.
The General State Auditor shall prescribe the audit findings assessment criteria and methodology.
The audit work on: the Budget of the Republic of Macedonia, the beneficiaries of the Budget of the Republic of Macedonia and their unit beneficiaries, the budgets of the units of the local self-government and their beneficiaries, political parties funded by the budget and the beneficiaries of European Union funds and other international funds, the funds shall be funded by the Budget of the Republic of Macedonia.
The audit work costs for the other legal entities specified in Article 1 of this Law, but not identified in paragraph 1 of this Article, shall be borne by the audited entity, in accordance with the Tariffs of the State Audit Office.
The Tariffs identified in paragraph 2 of this Article shall be approved by the Parliament of the Republic of Macedonia.
For the follow up audit requested by the legal entities, identified in Article 16 paragraph 1, (except for the audits conducted according to this Law), the fee shall be calculated in accordance with the Tariffs of the State Audit Office except, in instances where the request shall be made by the Parliament of the Republic of Macedonia.
The state audit shall be conducted in accordance with the provisions and procedures of this Law, and the public finance regulations.
The audit shall follow the INTOSAI Auditing Standards, published in the "Official Gazette of the RM"-No 56/98.
The state audit shall be conducted by an authorized state auditor, an employee of the State Audit Office.
The authorized state auditor may not be a member of a Board of Directors, supervising committee or any other body of another legal entity.
The authorized state auditor shall be a qualified individual holding an authorized state auditor certificate and shall meet the rest of the requirements specified in this Law.
If a complex issue should arise in the course of the state audit, that would require the use of an outside expert, not employed by the State Audit Office or the legal entity, (the audited entity), the State Audit Office may hire the services of professionals from organizations specialized in that area.
Referring to the opinion expressed by an independent expert, regarding the audit tasks, this shall not release the authorized state auditor from the responsibility of expressing an opinion or developing findings in the report.
When conducting the state audit, the authorized state auditor shall have free access to the official premises and property, the right to review the records, forms and other documents, as well as the right to demand explanations from the audited entity's representatives on all the significant issues regarding the audit.
The audited entity's legal representative shall be obliged to make all the required documents, legal papers, records, and statements available to the authorized state auditor, and to provide him/her with other information necessary for the audit.
The legal representative of the audited entity shall make confidential documents, available to the authorized state auditor.
The authorized state auditor shall be obliged to handle the confidential documents, as specified in the regulations.
Should the audited entity limit the scope of examination or prevent application of certain auditing procedures, the State Audit Office would be obliged to emphasize this in the report, in accordance with the auditing standards and notify the competent authority supervising the audited entity.
The data obtained and the observations made by the authorized state auditor in the course of the audit shall be considered confidential and may not be disclosed to third parties without authorization.
The authorized state auditor may not use the information he/she acquired in the course of the audit to gain financial or any other benefit for himself/herself or for another entity.
The provisions as specified in paragraphs 1 and 2 of this Article shall also apply to outside professionals hired by the State Audit Office, in compliance with Article 19, paragraph 1 of this Law.
The authorized state auditor shall not be allowed to conduct audits if:
1) He/she is a shareholder or has invested capital in the audited entity;
2) Had been previously employed by or had been the legal representative of the audited entity, within five years of his/hers departure;
3) Took part in keeping the accounting records or had prepared the annual financial statements and the financial reports of the audited entity; and
4) Is a spouse or a close relative, a guardian, adoptive parent, adoptive child, foster parent or foster child, of the owner or legal representative of the audited entity.
Upon completing the audit, the authorized state auditor shall prepare a draft report, in compliance with the auditing standards specified in Article 17, paragraph 2 of this Law.
The report identified in paragraph 1 of this Article shall be submitted to the legal preventative of the audited entity and to the managing key official of the entity for the period being audited, and the entity's governing body that, within 15 days of receipt, may submit written comments.
The authorized state auditor shall review the comments submitted by the audited entity, and then compile and sign the final report.
The final report shall be submitted to the legal representative of the audited entity; to the ministries or Funds supervising the audited entity's operations and to the managing key official of the audited entity for the period being audited.
The legal representative of the audited entity may lodge a complaint against the final report within 30 days of the receipt of the report.
Upon the complaint, the General State Auditor shall make a decision within 30 days from of the receipt of the complaint.
The document containing the decision to accept or reject the objection specified in paragraph 5 of this Article shall be included in an appendix to the final report.
The document specified in paragraph 7 of this Article shall be integrally presented in the Annual Report.
The competent authority supervising the audited entity's operations shall be obliged to notify the State Audit Office for the actions taken in relation to the findings presented in the audit reports, within 90 days of the receipt of the final report.
The State Audit Office shall be obliged to submit to the Ministry of Finance all audit reports containing findings in the area of finance.
Should the authorized state auditor in the course of conducting the audit determine that there is a reasonable ground for a misdemeanor or a criminal charge, should immediately, as soon as possible inform the authorities to initiate appropriate procedure.
The authorities identified in paragraph 1 of this Article shall be obliged to inform the State Audit Office within 90 days on the measures undertaken.
The General State Auditor shall submit to the Parliament of the Republic of Macedonia the audit reports on the Budget of the Republic of Macedonia, the ministries, the budgets and funds and state-owned enterprises established by law. Apart from the reports identified in paragraph 1 of this Article, the General State Auditor shall also submit to the Parliament of the Republic of Macedonia the audit reports containing disclaimer of opinion and the audit reports in which it has been assessed that the financial statements do not give a true and fair view of the state of affairs.
The authorized state auditor has to meet the following requirements:
1) Republic of Macedonia citizenship;
2) University degree in economics or law;
3) Authorized state auditor certificate;
4) Give a statement agreeing to adhere to the INTOSAI Code of Ethics.
The candidate, taking the exam for an authorized state auditor must have at least five years work experience in accounting or financial operations, or three years work experience in the area of auditing or financial control.
The authorized state auditor - exam shall be taken before a committee selected by the General State Auditor, and following the program prepared by the General State Auditor.
Members of the Committee shall be only individuals holding authorized state auditor certificate.
The program specified in paragraph 1 of this Article shall be approved by the Minister of Finance.
The General State Auditor shall issue authorized state auditor certificate to the indivdual who shall pass the exam specified in paragraph 1 of this Article.
The costs for taking the authorized state auditor exam shall be borne by the individual taking the exam.
The layout of the certificate, the examination procedures, and the examination fee shall be regulated by the General State Auditor.
A fine in the amount of 10 000 - 300 000 denars shall be imposed on a legal entity - audited entity, with an exception of the administrative bodies and the bodies of the units of local self-government if:
1) It does not make available the documents, records and reports and other information necessary for the performance of the state audit (Article 20, paragraphs 1,2 and 3) to the authorized state auditor; and
2) It limits the scope of the examination of the auditor or prevents him/her from applying certain auditing procedures (Article 20, paragraph 5).
The key official managing the audited entity shall be also fined 1 000 - 50 000 denars for the actions specified in paragraph 1 of this Article.
An individual - authorized state auditor shall be fined 1 000 - 50 000 denars if:
1) When conducting a state audit the auditor did not follow this Law and the procedures set out in the auditing standards (Article 17);
2) The working papers prepared or collected in the course of auditing had been used for other purposes, without obtaining entity's consent (Article 21, paragraph); and
3) Did not submit the report on the conducted state audit to the entities identified in Article 23, paragraph 4.
The appointment of the General State Auditor and his Deputy shall occur within 90 days of this Law coming into effect.
The General State Auditor shall within 90 days of his appointment draft the policies of the State Audit Office.
The tentative auditing standards shall will be approved and promulgated by the Minister of Finance, within 180 days of this Law coming into effect.
The authorized state auditor examination program and other provisions specified in this Law shall be drafted within 180 days of this Law coming into effect.
Until the day of the application of this Law, the ZPP will continue to perform the tasks of economic and financial audit.
The staff who had been working on economic - financial audit in the Payment Operation Office, until the date this Law comes into effect, may request to be transferred to corresponding appropriate positions in the State Audit Office, provided they meet the requirements specified in this Law, in accordance with State Audit Office internal regulations (organizational structure) and personnel policies (position descriptions).
The State Audit Office shall be given part of the property, office equipment, archives and records, and Payment Operation Office funds that have been used in economic-financial auditing. The part given to the State Audit Office shall be determined by the Special Committee established by the Government of the Republic of Macedonia for the division of the assets of the Payment Operation Office (ZPP).
The committee identified in paragraph 1 of this Article shall carry out the division of the property, material, technical and other assets and prepare a report on the division of the assets (division schedule), within 90 days of this Law coming into effect.
The committee identified in Article 1 of this paragraph should submit a report to the Government of the Republic of Macedonia.
This Law comes into effect on the eighth day of publication in the "Official Gazette of the Republic of Macedonia", except for the provisions from Article 1 to Article 13, and from Article 17 to Article 26 that shall be implemented the 180-th day of it coming into effect.
---Ill---
