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Assessing a
national PIC
system
Raymond Hill
Team Leader, PIC Task Force
European Commission
PEMPAL – 24 March 2016
Contents
• Assessing against what?
• Differentiation by client type
• Steps of the EU Accession Process
• Monitoring tools and Assessment criteria
• OECD/SIGMA – Assessment Principles of Public
Administration
 Principles on Internal Control and on Internal Audit
• Internal Control Maturity Model
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Assessing against what?
• No 'acquis' that requires transposition into
national legislation
• Countries are asked to adopt internationally
recognised internal control and audit standards
and EU good practices across the public sector.
 COSO model – Internal Control
 IPPF Standards – Internal Audit
3
Differentiation by client type
• Candidate Country
• Potential Candidate Country
• European Neighbourhood Country
4
Accession Process – Candidate
countries
• Screening - European Commission carries out
detailed examination to determine how well the
country is prepared, leading to a screening report
containing a recommendation whether or not to open
negotiations
• Negotiating position – the Candidate country must
submit its position and the EU must adopt a common
position.
• Closing the chapters – Can only be closed after the
every EU government is satisfied with the candidate's
progress, as analysed by the Commission.
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Monitoring tools
• Own monitoring
 DG Budget own assessment
 EU Delegation
• National monitoring
 Managerial Self Assessment
 Annual PIFC Assessments
 SAI reports
• Independent Assessment
 OECD/SIGMA
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DG Budget Assessment
Ongoing Assessment
 Desk scrutiny of policy documents and legislation
 Fact-finding missions, including meetings with:
- The Central Harmonisation Unit
- Budget users
 Annual Progress Reports
 Results of National Assessment (Annual Progress
Report)
7
EU assessment criteria
• Strategic framework and political steer
• Effective and proactive CHU
• Legal framework for Internal Control and Internal
Audit
• Facilitation of Managerial Accountability
• Set up of (centralised) Financial Inspection
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OECD Sigma – Principles of public
Administration
• Principles are
classified under 6
Key Reform areas
• Also a monitoring
framework –
quantitative and
qualitative indicators
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Sigma Assessment Principles
Key Reform Area: "Public Financial
Management"
• 8 key requirements
• 16 Principles
*
http://www.sigmaweb.org/publications/Principles-PublicAdministration-Nov2014.pdf
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Principles 6 and 7 – Internal Control
• Principle 6: The operational framework for
internal control defines responsibilities and
powers, and its application by the budget
organisations is consistent with the legislation
governing PFM and PAR.
• Principle 7: Each public organisation implements
Internal Control in line with the overall Internal
Control policy documents.
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Principles 8 and 9 – Internal Audit
• Principle 8: The operational framework for
internal audit reflects international standards and
its application is consistent with the legislation
governing public administration and PFM.
• Principle 9: Each public organisation implements
internal audit in line with the overall internal
audit policy documents as appropriate to the
organisation.
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Internal Control Maturity Model
Initial
Repeatable
Defined
Managed
Optimizing
•
Initial
Control Structure is not defined. Control occurs
incidentally.
•
Repeatable Control Structure is not defined, but control processes
may occur based on past success and management
oversight.
•
Defined
Control structure is documented, standardised and
integrated into control processes for the organisation.
•
Managed
The control process is regularly assessed and tested.
Detailed measures of the control process are collected
and reported.
•
Optimizing Continuous process improvement is enabled by
quantitative feedback from the control process.
Predictability, effectiveness and efficiency of an organization's internal
controls improve as the organisation moves through these five stages.
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