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ALSAI
Dr. Bujar Leskaj
PUBLIC AUDIT
207
quality, improving the quality and
increasing the number of performance
audits, in addition to the consolidation
of the financial and compliance audits,
ensuring
good
governance
and
increased
accountability
and
responsiveness
on
sound
financial
management. These objectives are in
line with the four main directions of the
EUROSAI Development Strategy, which
are capacity building, development of
professional standards, exchange of
knowledge
and
experience,
and
management in accordance with the
principles of good governance and
effective communication. Broad and
deep cooperation with the Parliament,
with citizens and civil society, with the
government and with all our partners in
the national and international level is
the most comprehensive guarantee in
the success of our efforts and objectives
for 2013.
* Dr. Bujar Leskaj Al SAI Chairman

AUDITIMI PUBLIK
209
THE ROLE OF SUPREME AUDIT
INSTITUTIONS IN DEVELOPING
PUBLIC FINANCIAL MANAGEMENT
As. Prof. Dr. Recai Akyel
I INTRODUCTION
As
a
result
of
globalization,
advancements in communication and
technological improvements, important
developments
and
novelties
are
witnessed in every field of social life. In
parallel with the processes experienced
in economic, political and social areas,
there is also a pressure for change in
public administration. In this context,
public administrations are reshaped
and the successful practices of private
sector are finding their way into the
public administrations.
The classical understanding of public
administration is being replaced by a
new public administration mentality
that is citizen oriented and open to
 President of Turkish Court of Accounts. 
continuous
innovation.
Today,
implementing the fundamental values
of democratic government such as
transparency,
right
to
information,
participation
and
accountability
is
among the priority goals of almost
every state.
Since Public Financial Management
(PFM) is one of the main elements of
public
administration,
the
developments and changes in public
administration (including internal and
external audit) affect PFM as well.
Public administration, PFM and public
audit are in interaction with one
another.
PFM AND EXTERNAL AUDIT
Supreme Audit Institutions (SAIs), which
conduct external public audits, are a
part of the PFM system in their
countries. The effective operation of
SAIs and the generation of reliable
reports by the SAIs play an important
role in the improvement of financial
system. The findings and suggestions in
those reports generally form the most
fundamental inputs of the reform
processes
in
PFM.
External
audit
focuses on providing consultancy and
contribution to the public entities. The
entities, the Parliament and the public

PUBLIC AUDIT
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No.4,January – April, 2013
are informed in an accurate and reliable
manner about the general functioning
of the PFM; the risks in the system are
put forward; and necessary suggestions
are developed to eliminate those risks.
According
to
Lima
and
Mexico
Declarations,
there
are
some
preconditions
for
conducting
an
objective and effective external audit.
Accordingly;
SAIs should be independent from
the
auditees
and
protected
from
external influences;
SAIs should have the necessary
functional, financial and institutional
independence in fulfilling their tasks,
and this should be regulated in the
Constitution;
SAIs should have the right to access
all records and documents related to
financial management and have the
power to request all kinds of verbal or
written
information
they
deem
necessary; and,
All public financial activities should
be within the scope of SAI audit without
considering whether they are included
in the national budget.
Generally accepted limits of external
audit can be summarized as follows:
SAIs do not audit the policies of the
government or public entities, and they
limit themselves to the audit of policy
implementation, except for the cases
when
laws
make
it
specifically
necessary.
SAIs should not intervene or seem
to be intervening by any means in the
management of the entities they audit.
SAIs should generate audit reports
based on the quality control process by
improving their institutional capacities
and
ensuring
the
professional
competency of their personnel.
PFM AND INTERNAL AUDIT
Although the objectives of internal
audit are parallel to those of external
audit, the most important characteristic
that distinguishes internal audit from
external audit is that it is situated
within
the
audited
entity.
In
an
effective PFM, the internal audit is
expected
to
add
value
to
the
management by contributing to risk
management, generating objective and
reliable information, and supporting the
development
of
internal
control
system.
It is considered that there are two
factors that affect the success of an
internal audit mechanism:
1 – Level of Independence: Internal
audit should have a certain degree of
independence so that the existing
situation can be presented in real. In
general, it is accepted to be less
independent than external audit.
2 – Professional Competency: Since the
activity area of the public sector has
widened, the internal auditors, like the
external
auditors,
should
have
knowledge and expertise in more than
one
field
(such
as
accounting,
information technologies and finance).
In a successful financial management
system, internal and external audit
mechanisms complement and support
each other. As external audit organs,
SAIs are tasked with reviewing the
effectiveness of internal audit. The
most suitable task sharing should be
made between the SAI and internal
audit, and their collaboration should be
ensured.

Prof. Dr. Recai Akyel
PUBLIC AUDIT
211
ALSAI
II EXPERIENCES
OF
THE
TURKISH
COURT OF ACCOUNTS (TCA)
In parallel with the recent global
developments,
the
pursuit
of
restructuring in public management has
gained speed in our country as well.
Significant changes have been made in
Turkish
public
administration
particularly as of 2000s. An extensive
reform has been undertaken in PFM,
which is considered to be one of the
most important components of public
administration.
The new PFM refers to the financial
system, established with the Public
Financial Management and Control Law
no.5018, which was accepted in 2003
and entered into force with all its
articles in 2005. The purpose of this
Law
is
to
ensure
the
effective,
economic and efficient collection and
utilization
of
public
resources,
accountability and fiscal transparency.
The
aim
of
the
Public
Financial
Management and Control Law is to
make the existing financial system more
effective and to build a PFM and control
system that complies with international
standards and the EU norms.
With the enforcement of the Public
Financial Management and Control
Law, audit is regulated under two main
titles as internal audit and external
audit. This Law foresees that the
internal audit is conducted by internal
auditors and the external audit is
conducted by the TCA.
EXTERNAL AUDIT
According to the Article 160 of Turkish
Constitution, the TCA is tasked with
auditing, on behalf of the Turkish Grand
National
Assembly
(TGNA),
the
revenues, expenditures and assets of
the public administrations within the
scope
of
the
central
government
budget, social security institutions and
local
governments;
and
with
performing other duties of audit or
examination assigned by laws.
The audit of the TCA is carried out with
the purposes of:
Submitting reliable and sufficient
information to the TGNA and the public
concerning the activity results of public
administrations, as required by the
power of purse;
Executing PFM in conformity with
laws, and safeguarding the public
resources;
Evaluating
the
performance
of
public administrations; and,
Establishing
and
extending
fiscal
transparency.
Public administrations within the scope
of the central government budget and
social
security
institutions,
local
governments, enterprises in which the
share of the public sector is more than
50%, domestic and foreign borrowing
of
government,
and
all
public
resources, regardless of whether they
are
in
the
public
administrations’
budget are subject to the audit of the
TCA.
In performing its duties, the TCA has
the power to;
communicate directly with public
administrations and officials;
call on relevant officials of all grades
and categories in order to obtain
information;
request representatives from public
administrations;
request all kinds of information and
documents related to audit from public
administrations and other people and
legal entities including banks; and,

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No.4,January – April, 2013
use experts from outside the TCA, if
deemed necessary.
The TCA does not undertake propriety
audit and does not render decisions
that limit or remove the discretion of
management. Audits are carried out in
accordance with the generally accepted
international auditing standards. For
maintaining quality assurance, each
stage of audit is reviewed constantly in
terms of its conformity with audit
standards,
strategic
plans,
audit
programs and professional code of
ethics.
EXTERNAL AUDIT REPORTS
The
audit
of
the
TCA
comprises
regularity audit (financial audit and
compliance audit) and performance
audit. Financial audit covers forming an
opinion on the reliability and accuracy
of
financial
statements
of
public
administrations and evaluating their
financial
management
and
internal
control
systems.
Compliance
audit
covers
the
examination
of
the
compliance
of
accounts
and
transactions related to the revenues,
expenditures and assets of public
administrations
with
laws
and
regulations. Performance audits are
carried out through measuring the
activity results related to the objectives
and
indicators
determined
by
administrations within the framework
of accountability.
As a result of these audits, other
matters that are related to the audit or
resulting from audit activities and that
are required to be clarified may be
reported as well. The reports of the
TCA, except for the cases forbidden by
laws, are announced to the public by
the President of the TCA or Deputy
President assigned by him within fifteen
days after the submission of the reports
to
the
TGNA
and
related
public
administrations.
The TCA submits the following reports
to the TGNA;
1 Statement of General Conformity: It
is prepared through evaluating the
reliability
and
accuracy
of
the
implementation results of the central
government budget and comparing
these with the results obtained from
the audits of public administration
accounts, and it is submitted to the
TGNA.
2
External Audit General Evaluation
Report: It is prepared considering the
regularity
and
performance
audit
reports
of
public
entities,
and
it
includes
the
significant
financial
matters
that
the
TCA
deems
appropriate to be communicated to the
TGNA.
3
Accountability General Evaluation
Report: It is prepared on the basis of
relevant evaluation reports of audit
teams on the accountability reports of
the public entities and the issues that
the
TCA
deems
necessary
to
be
reported to the TGNA.
4
Financial
Statistics
Evaluation
Report: The yearly financial statistics
published by the Ministry of Finance
are evaluated by the TCA in terms of
preparation,
publication,
accuracy,
reliability and conformity with the
predetermined
standards;
and
the
results are reported to the TGNA.
5
State Economic Enterprises Audit
Reports: The audit reports of State
Economic Enterprises are submitted to
the relevant commission in the TGNA
both individually and in the form of a
general report that summarizes the
important matters.

Prof. Dr. Recai Akyel
PUBLIC AUDIT
213
ALSAI
6 Other Reports: Those reports, which
are prepared as a result of audits and
which do not fall within the scope of
the reports mentioned above, may also
be
submitted
to
the
TGNA.
For
instance, the TCA may audit the
accounts, transactions and activities of
public administrations based on a
specific sector, program, project or
topic.
INTERNAL AUDIT
In the Turkish PFM framework, the
internal audit is defined as an activity of
consultancy
performed
to
provide
guidance with a view to improving and
adding value to the activities of the
public administrations. Internal audit
units, which are established within the
entities
but
foreseen
to
function
independently, form an integral part of
internal control. Internal auditors, who
submit their reports directly to the
head of the administration, cannot be
entrusted with any task other than their
principal duty.
The Internal Audit Coordination Board
has
been
established
under
the
Ministry of Finance in order to monitor
the internal audit systems of public
administrations. Internal audits are
performed in line with the auditing and
reporting standards established by the
Board on the basis of internationally
accepted standards.
Internal audit
reports
and
the
actions
taken
accordingly
are
communicated
by
heads of the administrations to the
Internal
Audit
Coordination
Board
within two months at the latest.
During the audits of the TCA, the
reports produced by internal auditors
are
obtained
and
used
in
risk
assessment. Since internal auditors are
more familiar with the auditee, the TCA
auditors communicate with internal
auditors throughout the audit process.
By virtue of this communication, the
TCA auditors obtain information from
internal auditors and their reports on
significant matters and risks.
III CONCLUSION AND SUGGESTIONS
The main role of an SAI, as an
independent
organization,
is
to
contribute to the sound functioning of
and to detect the deficiencies in the
financial system and to inform public
administrations, the parliament and the
public. SAIs are expected to act as
model
organizations
that
lead
by
example
through
implementing
contemporary management practices.
Within contemporary PFM systems,
internal and external audit corroborate
each other. The more effective the
internal audit is, the more successful
the external audit becomes and vice
versa; and the audit work becomes
easier. Both the SAIs and the internal
audit units should constantly evaluate
and renew themselves according to
changing needs because the major
factor
that
leads
to
success
and
effectiveness is institutional capacity.
SAIs should have a specific strategy
towards
internal
and
external
communication (the Parliament, the
media, public, auditees, etc.). The
stakeholders can be informed and their
expectations
can
be
understood,
particularly
by
means
of
external
communication.
The
public
administrations, the Parliament and the
public
should
attach
the
required
significance and value to the SAI
reports.
Accordingly,
the
audited

PUBLIC AUDIT
The Role of Supreme Audit Institutions in
Developing Public Financial Management
214
No.4,January – April, 2013
entities should be apt to benefit from
these reports.
The conduct of audits and reporting
processes
in
accordance
with
the
international standards will render the
audit results more reliable in the eyes
of the relevant parties, and ensure a
certain level of quality in the audit.
Speech by:
As. Prof.Dr. Recai Akyel
In the IV EUROSAI/ARABOSAI
Joint Conference
16 18 April 2013, Baku
Country Paper by Turkish
Court of Accounts (TCA)

AUDITIMI PUBLIK
215
AUDIT AND COUNSELLING BY SAIs :
OPPORTUNITIES AND RISKS
22
nd
UN/INTOSAI Symposium
5 7 March 2013, Vienna, Austria
Dr. Josef MOSER
Secretary General of INTOSAI
Madam
Speaker
of
the
Austrian
National Council,
Distinguished
Minister
of
Foreign
Affairs,
Distinguished Undersecretary General,
Dear Colleagues,
Participants at this 22
nd
UN/UNTOSAI
Symposium
Welcome and Introduction
I am delighted to welcome so many of
you
at
this
22
nd
UN/INTOSAI
Symposium. The vivid interest among
the
INTOSAI
community
is
ample
evidence that INTOSAI had its fingers on
the pulse of the times when choosing
the theme for this Symposium – “Audit
and Counselling by SAIs: Opportunities
and Risks, as well as possibilities for
engaging citizens“.
The active involvement of the INTOSAI
members in the selection of a theme in
the run up to this event and the lively
interest in the Symposium show that
INTOSAI has once again read the signs
of the times. As public resources are
becoming increasingly scarce, citizens
are justifiably asking
1. How can public governance be
designed
more
efficiently
and
economically, and
2. What contribution SAIs can make?
In response to these questions, we as
SAIs
must
develop
proposals
and
solutions
for
more
economic
and
efficient public governance on the basis
of our audit work and integrate these as
effectively as possible into the process
of government reform.