Community of Practice of
mutual study and exchange of experience in the sphere of public finance management
(PEMPAL) unites countries of the Central Asia and Eastern
Europe. Community was established in 2005, the goal was to strengthen
internal potential of countries in the sphere of public finance and expenditure
management. PEMPAL is supported by the World Bank, Organization of Economic Cooperation
and Development, Ministry of International Development of Great Britain (DfID), State Treasury of the USA, SECO, GTZ and the
association of public benefit "International Further Training and Development"
(InWent, Germany). PEMPAL Secretariat is situated in the
Centre of Excellence in Finance (CEF, Slovenia).
seminars were held in Slovenia
(2006), Moldova (2007), Turkey (2008) and Slovenia in April 2009. The
seminar, that was held in Georgia on 20-23 October this year, was attended by civil
servants in charge of internal audit in the public sector of 14 countries –
Albania, Bosnia and Herzegovina, Armenia, Georgia, Kazakhstan, Kirgizia,
Macedonia, Moldova, Republic of Kosovo, Tajikistan, Uzbekistan, Ukraine,
Croatia, Montenegro, as well as by specialists from Romania and Great Britain,
delegates from the World Bank, CEF and InWent.
Ukraine was represented by Head of Division
of the Department of Budget System Reformation of the Ministry of Finance Serhiy Lysunia and ones of the
oldest members of PEMPAL – Head of the Department of PIFC Harmonization of the MainCRO Maryna Barynina and Director of the Department of Organizational Operations
of the MainCRO Serhii Chornutskyi.
Official greetings on the occasion of opening
of the seminar were announced by the Minister of Finance of Armenia Tigran Davtyan, manager of
mission of the World Bank in Armenia Aristomen Varudakis and Chairman of Community of Practice Tomislav Micetic (Croatia).
Agenda included several themes: International
Professional Practices Framework, manuals of internal audit, training and
certification of internal auditors, Internal Audit Capability Model, PIFC
practical implementation, also logistics issues of Community of Practice.
Member of the Committee of Public Sector of the
Institute of Internal
Auditors (Global) Daniela Danescu (Romania)
presented international principles of professional practice, she made a stress
on changes, introduced during the last year. It was added new standards,
improved and interpreted the current ones. She also underlined crucial differences
between standards for private and public sectors.
Presentation of the manuals on internal audit
of the Republic of Kosovo and national manuals of internal audit of Albania, Georgia,
Kirghizia, Moldova and Ukraine was followed by a
It is interesting that in the Republic of Kosovo
internal audit started in a centralized form in Central Financial Agency in
2000 (as in 2003 in
Ukraine and some time later
long before adoption of laws about management of public finance and
responsibility (2003) and about internal audit (2007). Nearly in all countries
first variant of manual was developed with expert and financial assistance of
international organizations. Manual on financial audit (financial audit in a
decentralized system) in Armenia
is operational since 2002, and the law draft on internal audit passed the first
reading in the parliament this year. Internal audit in Croatia had
been introduced 3 years prior to adoption of the relevant law.
In the Republic of Kosovo
upgraded manual on internal audit went through "pilot approbation" in
25 ministries and municipalities; in Armenia
it was tested at three levels – in ministries, local authorities and public
non-commercial organizations; so far in Ukraine it was tested only in five
institutions of the central level. Nearly in all mentioned countries most of
the time was wasted on bringing the manual in the line with the national legislation
and glossary - with the translation.
first services of internal audit were established on the basis of inspection
units, in Ukraine, Moldova and Georgia - in an inspection
government authority under the MoF or coordinated by
Chairman of Community of Practice Tomislav Micetic told the present
about results of activity of the working group on training and certification of
internal auditors since December 2006. In particular, attention was paid to a three-level
model from the initial trainings in internal audit to certification of internal
The manager of Central Harmonization Unit
(CHU) of the Ministry of Finance of Armenia Karen Brutyan
outlined basic differences of Armenian strategy of introduction of educational
system, continuous professional formation and attestation of internal auditors.
They lie in the necessity of first introduction of higher academic (master)
education in the public finance sphere (including accounting in the public
sector, public procurements, internal and external audit and other disciplines related
to budget and tax processes), continuous professional formation and attestation
of internal auditors of the public sector in the future. It was a great
discussion on what authority (authorities) will be attested to internal
Internal Audit Capacity Model was discussed
during the workshop of Community of Practice for the third time,
its published variant was presented by Daniela Danesku.
During the seminar it was considered a practical
example of PIFC introduction in Georgia. Apart from the matters of
an "ideal model" of PIFC, common for all countries (financial
management and control, based on responsibility and managerial accountability,
internal audit (IA) and their harmonization), representatives of post-soviet
countries discussed themes, immanent to them. In particular, participants
discussed broadly place of inspection (within or outside the PIFC model) and
change of its role in response to development of novel FMC and IA), its
location (in MoF, in MoF
and Treasury or in another authority, including the one, that performs centralized
inspections) and functions (only set by description of the "ideal"
model or for transitional period also additional, determined by environment, legislation
and tasks). The present were also interested in practical interrelations
between supreme audit institutions (SAI) and decentralized internal audit,
possibility and forms of assuring quality of decentralized internal audit by CHU.
For example, in Kirghizia CHU is, in fact,
unit of IA methodology, it assesses work of internal audit services;
legislation of Moldova stipulates
assessment (once per five years) by the CHU of
internal audit services. The same provision is in the Ukrainian program of
activity and development of CHU till 2015. In Croatia "estimation team" is
established including a CHU specialist and two internal auditors of other
ministries; thus, there's a possibility for objective assessment (and improvement)
of standards and methodology, developed by the CHU.
In conclusion, participants of the seminar increased
the number of members of Executive Committee of Community of Practice, elected
them and discussed further steps and plans for 2009-2010. In particular, members
of Community of Practice chose Ukraine
as the host of the next plenary meeting, as one of the countries, in which
considerable progress in the PIFC sphere had been achieved. It was also additionally
proposed to hold a regional seminar for five post-soviet countries that are
nearly at the same level of PIFC development and have many common topics for
discussion – Armenia, Georgia,
Kirghizia, Moldova and Ukraine. Besides, the most interesting
topics for the future discussion were defined.