Bosnia and

Herzegovina

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Annex 2 to the TOR: Risk Consideration Checklist – HACT Framework

No. / Indicator / Highrisk / Significantrisk / Moderaterisk / Lowrisk / Indicatorrisklevel / Comment
1 / Theannualbudgetcontainsallsignificantgovernmentexpenditures,includingrelevantdonorcontributions / No / (NOT APPLICABLE) / Yes
2 / Budgetandperformance / Budgetdecisionsareonlynominallydebated.Littleconsiderationofpreviousperformanceistakenintoaccountwhensettingfuturebudgets. / Budgetdecisionsarefullydebated withassistancefromexpertcommittees.Fullconsiderationofpreviousperformanceistakenintoaccountwhensettingfuturebudgets.
3 / Budgetexecution / Governmenthistoricallydoesnotexecutebudgetsasplanned. / Government
historicallyexecutesbudgetsasplanned,buttherearesignificantexceptions. / Government
historicallyexecutesbudgetsasplannedwithlimitedexceptions. / Governmenthistoricallyexecutesbudgetsasplannedwithoutexceptions.
4 / Towhatextentareinternalcontrolsandfinancialproceduresadheredto? / Proceduresarefrequentlyover-riddenorignored.Emergencyproceduresareroutinelyused. / Proceduresaregenerallyfollowed,buttherearesignificantexceptions.Doubtexistsastowhetherornottheinternalcontrolsystemcanbereliedupon. / Proceduresaregenerallyfollowed.Whileexceptionsexist,theyare notfrequentenoughtopreventrelianceontheinternalcontrolsystem. / Always.
5 / Bankreconciliations / Manyaccountsarenotreconciledmonthly.Reconciliationsare oftenpoorlyperformed. / Anumberofsignificantaccountsarenotreconciledmonthly.Qualityis sometimespoor. / Generallybanksareproperlyreconciledeachmonth. Exceptionsexistbutappropriatefollow-upactionistakeninallcases. / Performedtoahighstandardforallbankaccountsatleastonceamonth.
6 / Transferofcashresources / Cashtransfersfromcentral/regionallevelstoprojectleveltakemorethanonemonth. / Cashtransfersfromcentral/regionallevelstoprojectleveltaketwotofourweeks. / Cashtransfersfromcentral/regionallevelstoprojectleveltakeonetotwoweeks. / Cashtransfersfromcentral/regionallevelstoprojectleveltakeaweekorless.
7 / Reportingofcashandassetpositiontogovernment / Analysisofcashandassetpositionmadetogovernmentcontainssignificantomissions. / (NOT APPLICABLE) / Fullanalysisofcashandassetpositionismadetogovernment.
8 / Financialaudit/SAIauditorgeneral
*Fordecentralizedgovernments,considerconsolidatedauditcoverage,ifavailable. / Externalauditcoverslessthan80%ofcentralgovernmentexpenditures. / Externalauditcovers80%to90%ofcentralgovernmentexpenditures / Externalauditcovers90%ofcentralgovernmentexpenditures. / Externalauditcoversallcentralgovernmentexpenditures.
9 / SAIindependence / SAIreportstogovernmentagency. / (NOT APPLICABLE) / SAIreportstolegislature(orequivalentjusticesystem).
10 / AuditstandardsappliedbytheSAI / SAIappliesnationalauditstandards,whicharesignificantlyinconsistentwithinternationalstandards. / SAIappliesnationalauditstandards,whichcomplywithinternationalstandards. / SAIappliesinternationalauditstandard.
11 / Follow-upactionto auditreports / Pointsraisedby externalauditareinfrequentlyfollowedup. / Pointsraisedby externalauditareusuallybutnotalwaysfollowedup.Asignificantnumberofpointsrecurinfollowingyears. / Pointsraisedby externalauditarealwaysfollowedup.Inafewcasespointsrecurinfollowingyears. / Pointsraisedbyexternal auditarealwaysproperlyfollowedup.Pointsgenerallydonotrecurinfollowing years.
12 / Countryhasanationalprocurementframework / No / (NOT APPLICABLE) / Yes
13 / Transparencyofauditprocess / Statutoryexternalauditreportsareinfrequentlypublished.Theyarerarelydebatedinthemedia,evenwhenofpublicinterest. / Moststatutoryexternalauditreportsarepublished.Theyaresometimesdebatedinthemediawhenofpublicinterest. / Allstatutoryexternalauditreportsarepublished.Theyareusuallydebatedinthemedia whenofpublicinterest. / Allstatutoryexternalauditreportsarepublished.Theyaredebatedinthemediawhenofpublicinterest.
14 / Staffqualificationsandskills / Itisoftenunclearwhetherstaffhavetheskillsandqualificationsnecessarytodischargetheirduties. / Insomecasesitisunclearwhetherstaffhavetheskillsandqualificationsnecessarytodischargetheirduties. / Inonlysomeisolatedcasesisitunclearwhetherstaffhavetheskillsandqualificationsnecessarytodischargetheirduties. / Itisalwaysclearthatallstaffhavetheskillsandqualificationsnecessarytodischargetheirduties.
15 / Financialsystems / Financialsystemsonlycaptureandreportonthemostbasicfinancialdata,andthisisfrequentlyunreliable.Systemmaintenanceandperformanceis generallypoor. / Financialsystemsonlycaptureandreportonthemostbasicfinancialdata.Whiletherearesystemmaintenanceandperformanceproblems,generally thesystemisstable. / Financialsystemsareadequateformostbutnotalldatacaptureandreportingneeds.Theyarereliableandproperlymaintained. / Financialsystemsareadequatefordatacaptureandreportingneeds.Theyarereliableandproperlymaintained.
16 / Environmentalconditions / Naturaldisastersorsignificanteventsregularlyoccurthatdisplacecitizensandresources. / (NOT APPLICABLE) / Naturaldisastersorsignificanteventsthatdisplacecitizensandresourcesrarelyorneveroccur.
17 / Exchangeratevolatility / Foreignexchangeratesfluctuatesignificantlyonadailybasis. / Foreignexchangeratesfluctuatesignificantlyonaweeklyormonthlybasis. / Foreignexchangerateshaveremainedrelativelyconsistent,withtheexceptionofsignificantone-offfluctuations. / Foreignexchangeratesdonotfluctuatesignificantly.
18 / Existenceofablackmarket / Blackmarketisprevalentandinfluentialinthecountry. / Blackmarketexistsandhassignificantinfluenceinthecountry. / Blackmarketexistsinthecountry,buteffectiveactionsarebeingtakentoeliminateorlimititsinfluenceinthecountry. / Blackmarketmayexistbutdoesnothaveaninfluenceinthecountry.
19 / Anyotherspecificitemsidentifiedbyagency
Examples:Inflation,reliabilityofstatisticsbureau,parliamentariancontrol,unemploymentrate,transparencyofinformationcollection

Prepared by CEE/CIS Regional Office - 11 April 20141 | Page