Public Internal Financial Control Research Articles

The main aspects of implementing the system of public internal financial control in Ukraine system

The main aspects of implementing the system of public internal financial control in Ukraine system

Improvement of the monitoring process during the functioning of risk-oriented internal control

This article summarizes the arguments and counter-arguments within the scientific discussion on the issues of internal control and risk management. Systematization of sources and approaches to solving the problem of improving the efficiency and quality of internal control has shown that the monitoring of internal control measures plays a significant role in the subject process. Internal control in the Ministry of Defense of Ukraine and the Armed Forces of Ukraine is implemented to meet the requirements of a number of documents of national importance in the field of public internal financial control of Ukraine. The study of improving the quality of internal control monitoring in the article is carried out in the following logical sequence: the main aspects of the regulation of monitoring of control measures in the process of functioning of the internal control system are considered; recommendations for improving the quality of internal control monitoring are provided. The article provides a partial analysis of the regulatory framework in the subject area in order to find relevant innovations in the regulation of internal control and risk management in budgetary institutions. Currently, the Ministry of Defense of Ukraine is a leader among other Central executive bodies in the implementation of internal control and risk management, so this experience can be used in other areas where there is a need for risk management. The results of the study can be useful for managers, researchers, risk managers, and for all who are interested in risk-oriented internal control and risk minimization in their activities. The article uses methods of scientific knowledge: analysis and synthesis. The main purpose of the study is to provide the head of the institution with recommendations aimed at improving the system of internal control in the subordinate institution by improving the process of monitoring the implementation of control measures.

An Overview on the Development of Internal Control in Public Sector Entities: Evidence from Kosovo

Purpose: The development and implementation of Public Internal Financial Control (PIFC) in the management processes plays an important role in providing sound financial management, transparency, efficiency and effectiveness in the public sector entities. Design/Methodology/Approach: In this paper we have analysed the annual reports on the functioning of the PIFC system in the public sector of Kosovo for the 2014 – 2017 period. The analysis has been completed even more, based on the annual reports of National Audit Office, progress reports published by the European Commission, showing the progress achieved under the EU directives as well as the data from the monitoring reports of SIGMA (Support for Improvement in Governance and Management). Findings: The findings show that the implementation of rules and procedures for internal control in budget organizations lags behind the development of the overall framework. Practical Implications: Continuous improvements in the field of Public Internal Financial Control are important steps in the process of European integration, while Kosovo has made considerable efforts to develop the control environment and implement the PIFC principles, particularly by establishing the appropriate legal, and institutional framework to support the PIFC system. Originality/Value: PIFC development is a continuous process and is part of the public administration reform, hence this paper contributes in identifying possible gaps and weaknesses in the system of internal control in Kosovo and provides recommendations for their improvement.

INTERNATIONAL STANDARDS OF STATE FINANCIAL CONTROL

In this work, the authors have examined the concept of “standards” and “standardization” relating to public finance and public financial control. It was recognized that national financial systems activities should be based on generally accepted international standards in order to enhance professionalism and efficiency. Attention was paid to the peculiarities of national standards of the United States of America and European Union countries, in particular the United Kingdom of Great Britain, Lithuania, Georgia. As part of the analysis of the Association Agreement on Public Internal Financial Control, it was determined that cooperation between Ukraine and the European Union, the European Atomic Energy Community, and their Member States takes place through harmonization with the following international standards: the Institute of Internal Auditors (EA IIA), The International Federation of Accountants (IFAC) and International Organisation of Supreme Audit Institutions (INTOSAI). Much attention was paid to the concept of public internal financial control developed by the European Commission to provide a viable model capable of assisting national governments in revising internal controls in the field of finance and modernizing them in accordance with international standards and best practice in countries- members of the European Union. The scope of the aforementioned concept, its essence, its main elements, and features was determined. The standards of the international organization INTOSAI were analyzed, containing the guiding principles of the audit activity, the peculiarities of their implementation and direction; the activities of the International Professional Association of Internal Auditors EC IIA (European Confederation of Institutes of Internal Auditing); standards developed by the International Federation of Accountants (IFAC); the activities of the Committee of Sponsoring Organizations of the Treadway Commission COSO. In addition, the article identified the essential elements of an efficient and effective internal financial control system. Keywords: standardization, state financial control, international standards.

Some aspects of reforming the system of public internal financial control

Some aspects of reforming the system of public internal financial control

Public internal financial control reforming in Ukraine: conceptual foundations and practices

Public internal financial control reforming in Ukraine: conceptual foundations and practices

The Role of Internal Control in Managing The Risks Specific to The Financial Field

Abstract This article deals with a currently discussed topic, namely that of preventive financial control, a concept that has to ensure a reasonable use of public funds in a transparent, economical, efficient and effective manner. In this sense the issues related to public internal financial control are considered instruments that actively influence the organizational and managerial culture of the public entity in a positive manner by engaging in control actions that are meant to identify and stop the possible illegal activities or actions, fraudulent or uneconomical use of public funds. I further detail the concept of public financial control with the two principal branches, that is the preventive financial control and the preventive financial control proper. The preventive financial control proper, by exercising the control visa for every financial supporting document affecting public funds, is a cornerstone regarding the exercise of financial control activity.

Методика внутреннего аудита казенного учреждения

In the process of public administration reform there has begun the implementation of modern international control and auditing standards in the public sector. The need for the improving of the efficiency of public administration requires the use of enhancement processes of public finance application and use, which in turn depends on the quality of feedback. The feedback was provided earlier by the control and auditing services, which were recording the cases of violation but at the same time, the evolution of the public internal financial control requires a shift in emphasis from the detection of violations to the analysis of the processes of the use of the resources. Not downplaying the importance of the elimination of these violations, the analysis of the main processes which involved the spending of budgetary funds, the identification of bottlenecks in such processes and introducing recommendations aimed at minimizing of the occurrence probability of adverse events is now the prevalent task of the modern state of the public internal auditing. Effective public internal auditing is designed to provide continuous assessment of the state internal control and it should help in the conditions of modern changing environment and regulatory shifts, by providing modern public administration. However, the liquidation or slow transformation in the process of reorganization of existing control structures, creates the risk of loss of the previously accumulated experience, as well as ineffective implementation of international standards of internal control and internal auditing, testifying to the fact of relevance growth of the research topic. This paper provides with the technique of internal auditing of state-owned institutions, which was developed on the basis of synergy works of domestic and foreign scholars and practitioners.

The Impact of the Crisis on Healthcare Risk Management in Slovenia: The Case of Regional Hospitals

The main purpose of the article is to identify which components of public internal financial control (PIFC), as part of risk management, have been improved by the crisis the most at the regional level, and what is the possible reason for that. During the period 2008–2014, healthcare in the EU and consequently in Slovenia was under the pressure of aggravated circumstances. Therefore, it is important that healthcare organizations, especially regional hospitals, as a main provider of secondary healthcare, have risk management tools in place that prevent risks and provide a reasonable assurance that public funds are being used for the intended purpose. To test which components significantly improved in that period, a paired-samples t-test is performed on a sample of 10 Slovenian regional hospitals. The empirical results show that the components of risk assessment and control activities saw the greatest improvement.

Public Internal Financial Control. Evidence from Albania

Public Internal Financial Control (PIFC) was developed in the late 90s as means for Eastern Bloc countries working toward full membership in the European Union (EU) to implement the necessary control systems to safeguard public resources. PIFC is an integral part of the National Strategy for Development and Integration (NSDI). This document, produced in March 2008, replaced the National Strategy for Social and Economic Development and set priorities and medium to long-term targets, strategic objectives for Albania and also includes a set of operating principles to ensure that government policies, planning and their implementation will be carried out in an integrated manner. The aim of this paper is first to list the reasons for implementing a different system and the importance of changing the system to Financial Management and Audit for Albania, and second, to examine, through a comparative analysis, the effectiveness of the implementation of the new system of financial management and control in the public sector comparing the two systems. By giving an opinion on each component of the system, this paper aims at analyzing, in a critical way, elements of the different perspectives of the two systems, their advantages and disadvantages.

Factors Affecting the Effectiveness of the Implementation of a Modern System of Financial Management and Control in Albania

One of the three pillars of public internal financial control is financial management and control. Through this work, we aim to address the factors which influence the effectiveness of the implementation of a modern system of financial management and control in public sector entities.''The model of Public Internal Financial Control is welcomed and widely implemented in many countries, within and out the European Union. It has a track record of success and I strongly recommend that countries should follow the exciting journey toward the world art of internal control system ''. This system means: assignment of authority and responsibility; empowerment and accountability; and appropriate reporting lines, resulting in improved governance of the organization.Based on data on self-evaluation questionnaires (COSO model) designed by CHU / FMC for public units of the general governance, about the opinions on each component of the system and on the first results obtained from questionnaires sent in some local government units it will be analyzed, that the effectiveness of the modern system of FMC in Albania depends on: The level of knowledge, in the Albanian context, of concepts and principles of FMC; Simultaneous functioning of its five components for each category of principles; Undertaking the appropriate management actions.

The Development of Public Internal Financial Control in Albania – And His Role in Strengthening the Managerial Accountability

The concept of Public Internal Financial Control (PIFC) has been developed by the European Commission in order to provide a structured and operational model to assist national governments in reengineering their internal control environment and in particular to upgrade their public sector control systems in line with international standards and EU best practice. The democratic changes affecting all areas of life in the last years, have led to reforms in the management of public finances of the public sector in the Republic of Albania. On the road of the accession to the European Union, Albania is in the process of important conceptual, legislative and structural reform of the Public Internal Financial Control framework with the aim of strengthening the managerial accountability of the managers of public sector organizations and further develop independent internal audit. The paper aims to give some key issues regarding PIFC development in Albania such as: the level of transparency regarding the status of the financial management and control and internal audit in the public sector; the awareness of the Heads of public organizations about the importance of sound financial management and control and to enhance their managerial accountability; information about the self assessment of the heads of public sector organizations on the adequacy and the effectiveness of internal control and about the progress made. It also outlines the weaknesses, solutions and development opportunities based on the assessment of the status of the financial management and control systems as well as of the internal audit. Through conclusions it summarizes the main directions in which the Albanian institutions must be focused in the future for further development and improvement of management of public resources. The development of the new model of public internal financial control in Albania demands from all the participants in the process, leading to effective action in accordance with their roles and responsibilities. Only proper implementation of new legislation and efforts by all stakeholders can lead to achieving the goal - to create a modern system, reliable and functioning of public internal financial control. In this regard the CHU/FMC will outline specific measures related to strengthening managerial accountability and updating of legislation and methodology in the field of internal control in accordance with EU legislation and best practices. As one of the three pillars of the Public Internal Financial Control System, Internal Audit has developed and continuously improved in order to take its modern role as advisor for the assessment and systems and contributing to the achievement of strategic and operational objectives of the organization, always in accordance with international standards and best practices. DOI: 10.5901/ajis.2014.v3n4p301

The Audit of the Financial System, Development and the Gaps in Albanian Businesses An over-view of PIFC Principles and Financial Management

Recently politicians and economists have often talked about structural reforms as the path toward sustainable economic growth. The implementation of the Competition Policy and Law is the most effective and less costly reform because its daily consistent implementation leads to direct benefits for businesses and citizens. The direct outcome of the implementation of this reform is increased market awareness, which, in turn, leads to increased efficiency in resource use by the society. The European Union has established, in the framework of Enlargement and the Public Internal Financial Control concept (PIFC), a set of principles in relation to sound financial management of public resources, resulting from both national and international financing. This set of principles is suggested to be followed and adhered to by the Republic of Albania in their relevant legislation and implementation. Internal Audit is present in Albania for developing this system. In the assessment carried out by the EU in July 2008, they identified that the internal audit law needed to be brought up to date in light of the PIFC requirements. Their main points were we are focus in this paper research are: 1.Over-lapping audit process between the High State Control and Internal Audit; 2.The audit of smaller entities should not be carried out by Albanian business. However if the audit work does not represent a considerable workload, the audit could be maintained in Albania at least as a temporary solution. The Albania government would be responsible for assessing the training needs, provide training and certification of internal auditors, including developing continuous training programs in Republic of Albania. DOI: 10.5901/mjss.2013.v4n10p209

Actual problems of reforming the system of public financial control in Ukraine

The article considers the current system of state financial control in Ukraine, summarizes the key drawbacks of such a system is considered modern directions of reforming the current system and built the future system of state financial control with regard to the field of public internal financial control in such a system.

Modern public internal control systems and accountability in health care organisations

The introduction of NPM principles changed the meaning and the contents of public sector accountability as it is no longer intended as a mere compliance with rules and procedures but as the need to give an account to the citizenry, in terms of how results are achieved and resources are used in their pursuit. Accountability for results requires the modernisation of traditional control systems. These check whether regulations are followed without ensuring that the achievement of objectives is controlled. Confirming the growing need in modernizing internal control systems and increasing managerial accountability and transparency in spending public money, the European Commission has developed a reference model for the public sector: Public Internal Financial Control – PI f C. The paper aims at contributing to the relevant debate on the usefulness of internal control systems by exploring the implicit positive relationship between them and managerial accountability envisaged in the PI f C model. To this end the research focuses on a case study set in the context of Italian health care sector and in the main health care organization located in the Region of Sardinia.

Internal auditing as a tool for improving efficiency in public health

Notranja revizija kot orodje za izboljšanje učinkovitosti poslovodenja v javnem zdravstvu Notranjerevizijska dejavnost je dejavnost sodobnega časa. V Sloveniji v obdobju zadnjih desetih let zaznavamo izredno hiter razvoj in uveljavitev notranjega nadzora javnih financ na področju organizacij javnega zdravstva. Za proračunske uporabnike je notranjerevizijska dejavnost tudi predpisana z zakonom. Kot taka postaja v zadnjem času vse bolj vpeta tudi v poslovanje javnih zdravstvenih zavodov. Njeno delovanje označuje preizkušanje in ocenjevanje zadovoljivosti delovanja sistema notranjih kontrol in svetovanje pri njegovem izboljševanju zato, da bi zagotovili učinkovito in uspešno obvladovanje poslovnih tveganj bolnišnice. Poslovno tveganje razumemo kot vsak neugoden dogodek, ki vpliva na učinkovito in uspešno doseganje zastavljenih ciljev javnega zdravstvenega zavoda. Za obvladovanje tveganj je sicer odgovorno poslovodstvo, notranja revizija pa mu pri tem nudi ustrezno podporo. Svoje poslanstvo lahko notranja revizija izpolni uspešno le pod pogojem, da ima poslovodstvo ustrezno védenje in znanje o notranji reviziji.