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REPUBLIC OF BULGARIA

National Audit Office
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EUROPEAN UNION

Delegation of the European Commission to Bulgaria

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COMPLETION OF A EU TWINNING PROJECT FOR STRENGTHENING THE NATIONAL AUDIT OFFICE

The Twinning Project “Strengthening the Bulgarian Independent Public External Audit Institution” has been successfully completed under PHARE with the support of the European Commission. The project, amounting to 2 million Euro, was launched in February 2002 with the UK National Audit Office as a twinning partner.

35 experts from theUKNAO, the Netherlands Court of Audit, the UK Audit Commission and the Northern Ireland Audit Office were involved in the Project. 42 seminars and workshops with a total duration of 296 working days were held. 340 auditors and administrative staff from the BNAO and its Regional Offices participated in the different training events. 7 study tours to Member State Supreme Audit Institutions took place and 52 auditors and administrative staff took part in them.

The following was achieved within the four components of the Project:

  • Development of the legal framework

The legal framework required to implement the National Audit Office Act, adopted in December 2001, has been developed. More than 15 regulations and rules have been adopted to comply the BNAO internal legislation with the best European practices.

The BNAO was one of the first Supreme Audit Institutions in Central and Eastern Europe to develop and adopt rules for its role in the fight against fraud and corruption. The important input to the issues has been made by the International Conference on the Role of Supreme Audit Institutions in combating fraud and corruption and their cooperation with other Authorities held in Sofia in February 2003. The Minister of Justice, the Deputy Chief Prosecutor of the Republic of Bulgaria, the Chairman of the Parliamentary Anti-corruption Commission, as well as the First Vice President of INTOSAI and presenters from the European Court of Auditors, UKNAO, Netherlands Court of Auditors, the SAI of United States, the Polish Supreme Chamber of Control, OLAF and the Board of Auditors for NATO participated in discussions.

  • Adopting and implementing the international audit standards

The most important result achieved during the Twinning Project was that the BNAO already applies audit methodologies and approaches consistent with the EU and international practices.

BNAO adopted ten audit standards, which were published in the Official Gazette in June 2002. The guidelines for their implementation were developed and tested in audit practice. Guidelines for implementing individual articles of the BNAO Act, rules for the audit of EU funds, Strategy and Audit Policy of the BNAO and rules for quality assurance and quality control of the audit activity were also adopted. All these documents have been included in the Audit Manual, prepared under the Twinning Project.

The audit methodologies were tested and the skills of auditors were enhanced through pilot audits. Nine pilot audits have been completed: four financial audits, two audits of the budgets of municipalities, two performance audits and one audit of EU Phare funds. Reports on the results of these audits are published on the BNAO web page. The opinion of the UK and Dutch experts is that these audits, and the underlying methodology complied with best EU and international practice.

Further 14 pilot audits started in June 2003. Included within the pilot audits are audits of the SAPARD and ISPA programmes which are examining the extent to which available funding is taken up by the end beneficiaries. The visits by experts to continue until these audits are completed with the financial support of OECD/ SIGMA.

  • Strengthening the management and administrative capacity

The management and administrative capacity of the BNAO has been strengthened in line with the increased requirements of the European Commission.

All necessary internal rules, regulations and decisions, which set out different aspects of the activities of the BNAO, were adopted. These comprise the Administration Manual, prepared under the Twinning Project.

The structure of the BNAO was improved. In line with common EU practice the Office has been restructured on the basis of the type of audit undertaken by the Audit Departments.

The BNAO adopted its Human Resource Policy and established a Directorate with responsibilities in this area. Statements of the required competencies of auditors and administrative staff were agreed. Functional Descriptions of all administrative Directorates and Departments were adopted. A system for staff appraisal was developed and pilot tested in the Human Resource Directorate.

A long-term Staff Training and Development Strategy was adopted for the first time and induction training for staff was introduced These measures ensure a continuing training process aiming to develop the professionalism and the necessary capacity of the BNAO.

  • Improved IT support

In order to meet the increasing requirements for computerisation of the audit process the BNAO updated its IT Strategy in line with the best EU and international practice.

The implementation of the first stage of this strategy was achieved through a supply contract funded under the PHARE Programme. Hardware and part of the specialized software were supplied under the contract and over 30 auditors have so far been trained in the use of specialised audit software. Work has commenced on the development of a new technological environment for access to information, resources and systems of auditees for audit purposes. Work has also started on an integrated administrative system within the BNAO.

The implementation of the second stage of the IT strategy will continue in a new Project, funded under PHARE 2003.

The Twinning Project has successfully achieved its aim of helping to develop the Bulgarian National Audit Office as an independent and professional external audit institution capable of applying audit methodologies consistent with the best EU and international practices.

The BNAO was one of the first Supreme Audit Institutions in Central and Eastern Europe to develop and adopt its own audit standards consistent with the international audit standards and the Guidelines for their implementation in the European countries.

The preventative role of the BNAO in the fight against fraud and corruption and its interaction with all public authorities and non-governmental organisations in this field is highly regarded internationally.

The administrative capacity of the BNAO and its ability to meet demanding EU criteria was strengthened considerably.

The improved quality of the audit process has enabled the BNAO to provide the Parliament, the Government and the public with reliable and high quality information on the effective use of budgetary and other public funds and the relevant EU institutions with information on the spending of EU funds.