Download Concept of internal control and risk management in the context of

Concept of internal control and
risk management in the context
of public sector
BAKU,
23.01.2012
STEFAN BELCHEV –
INTERNAL AUDIT
DIRECTOR MoF BULGARIA
What is PIFC
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The concept
Activities
Strategy
Two schools of IC systems in Europe
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Centralized /traditional/
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Third ex-ante controls
Lack of managerial responsibility
 Decentralized
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Reliable IA function
MA approach
Control environment and the
principal elements of PIFC
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Reasonable assurance can be provided that public
funds are being used for the intended purpose...
…and in accordance with economy, effectiveness and
efficiency
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Managers need to be accountable
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Follows the latest in International Standards
The 3 pillars of PIFC
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Managerial accountability – sound financial
management and control
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Functionally independent internal audit
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The Central Harmonization Unit as a main
driver for change
-independent assessing role of SAI`s-
4 stages to implement PIFC
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Conceptualization
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Development of the organizational framework
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Legal framework
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Staff development policy
The function and role of the CHU
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The first steps
Analysis of the current control systems: the gap
analysis
Introducing the new laws and regulations
From development to monitoring: compliance audit
Ongoing staff development
The CHU as a Centre of Excellence
CHU networking
Some words about Internal Control
- Definition These elements of an organization (including its
resources, systems, processes, culture, structure and
tasks) that, taken together, support people in the
achievement of objectives
Internal Control - Concept
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Internal control is a process
Internal control is effected by people
Internal control can be expected to provide only
reasonable assurance
Internal control is geared to the achievement of
objectives
Objectives of Internal Control
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compliance with applicable laws and regulations and
internal policies;
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reliability of internal and external reporting;
and
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effectiveness and efficiency of operations.
COSO’s View of IC
Process, effected by an entity’s board of directors,
management and other personnel, designed to provide
reasonable assurance regarding the achievement of
objectives in the following categories:
 Effectiveness and efficiency of operations
 Reliability of financial reporting
 Compliance with applicable laws and regulations
COSO Model
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Control Environment
Risk Assessment
Control Activities
Information & Communication
Monitoring
TIME FOR QUESTIONS…