Representatives of the Supreme State Audit attend the explanatory meeting organized by the European Commission for Chapter 32, "Financial Control"


The integration processes in the European Union have come to the moment of listing and explaining the entire legal and regulatory framework of the EU, which should be a functional part of Albania's systems and institutions.

In this context, on December 5th 2018, in Brussels was organized a meeting on Chapter 32 by the European Commission, DG NEAR, which consists of:

- Public Internal Financial Control, in all of its components, with a focus on the legal framework and internationally accepted standards, namely COSO-Internal Control and Integrated Framework; INTOSAI Guidelines for Good Governance; and Internal Audit.

- External Public Audit, focusing on the institutional, functional and financial independence of the Supreme State Audit, the quality and impact of the audit activity in compliance with INTOSAI's international standards.

- Protecting finances of the European Union, focusing on the efficiency of the Financial Inspection function in Albania.

- Protection of the Euro from speculation / counterfeiting (offense), focusing on the Bank of Albania's activity in this regard.

The Supreme State Audit was represented at this meeting by the Director-General, Ms. Lindita Milo and Chief Auditor Ms. Valbona Gaxha. Mr. Raymond Hill, representative of the European Commission, DG Budget presented the key aspects of the standards that should be part of the Albanian reality, as well as implemented by the SAI as an external public auditor.

Mr. Hill noted that he recently had a meeting at ALSAI’s Offices and found “significant developments”, profoundly qualitative changes and in line with INTOSAI's international standards. He clearly stated the expectations of the European Commission from Albania regarding the external public audit, which relate to: the constitutional and legal framework - that should fully guarantee the functional, organizational and financial independence of SAI; institutional developments in line with the Strategic Development Plan; Audit work in fulfillment of INTOSAI standards; and sufficient administrative capacity.

The speech of SAI representatives assessed the details of key aspects of SAI functioning, which relate to the trinomial – independence, working quality and real impact – for a better governance and efficiency of public money. In the expectation analysis, the European Commission representatives were informed that ALSAI, based on assessing functional and financial independency from the Peer review process by Austrian counterparts, has addressed to the Albanian Parliament some amendments for the organic law of the SAI.

It was also noted that the SAI's annual activity is based on the 2018-2022 Development Strategy, which is designed in line with the strategic developments of EUROSAI and INTOSAI. Moreover, this Strategy and Action Plan has been evaluated and received comments from SIGMA. The end of 2018 will enable a comparison of the first year indicators for the implementation of this strategy in concrete terms for the set objectives, namely more financial audits according to standards or more Performance Audits, etc.

In addressing the improvement of the audit work quality, despite the fact that ALSAI has built a quality control and quality assurance system, it is aware that the real improvement is closely linked to the quality of each individual auditor at any given moment. This process cannot be accomplished immediately, since the audit is a work practice closely related to the work mentality over the years. Therefore, improving quality as the full implementation of 4th level standards requires, not only requires intensive training but also serious and concrete confrontations with audited entities, with a view to understanding and identifying factors of good governance at the central and local level. ALSAI considers the quality of audit work associated with the impact level of findings and recommendations, addressed to public units to increase accountability and efficiency of using budget funds.

Concerning the above aspects, in response to the SAI's question on the best instruments and practices that could be recommended to improve the impact of its audit work, Mr. Hill stressed the necessity of close cooperation with the Unit of Harmonization at the Ministry of Finance and Economy, which should play the role of a methodical guidance of all public units regarding the implementation of internal financial control and internal audit, since the efficiency of the whole system depends on the operation quality of this unit and the cooperation with the SAI, in order to be on the same front for stopping abuse and public money mismanagement.