Summary of the EURORAI Seminar held in Székesfehérvár

2018-10-25 08:45:00   |   Author: Hoppál Krisztina Rita

Audit experience acquired in auditing companies owned by local and regional authorities was the key focus of the autumn seminar of the European Organisation of Regional External Public Finance Audit Institutions (EURORAI) held in Székesfehérvár, Hungary, on 17 and 18 October 2018. This international event was attended by 180 experts from nearly 70 supreme audit institutions in 25 countries, including representatives of the Task Force on Municipality Audit (TFMA) of the European Organisation of Supreme Audit Institutions (EUROSAI). In his opening speech, Mr. László Domokos, President of the State Audit Office of Hungary stressed that companies owned by local authorities and providing public services are of the paramount importance for local communities, and therefore the mutual sharing of audit experience can help these companies to operate more efficiently and effectively.

 

The State Audit Office of Hungary is an active member of the international community of supreme audit institutions, and has been an associate member of EURORAI since 2001. This allows the State Audit Office of Hungary, as a national supreme audit institution, to share its experience at a European and a regional level and to learn about the best audit practices. The fact that EURORAI held its autumn Knowledge Sharing Seminar in Székesfehérvár, on 17 and 18 October 2018, was a contribution to this effort. The central theme of the Seminar was the audit of companies owned by local authorities.

 

 

An opening event was held on 17 October, where Tihamér Warvasovszky, Vice President of the State Audit Office of Hungary, Dominique Roguez, President of EURORAI, and Péter Róth, Vice Mayor of Székesfehérvár, delivered an address. During this opening event, speakers said that the financial management and financial balance of municipalities was given particular attention in a number of European countries, and therefore the topic of the professional conference might be of great interest on the international scene as well.

 

 

The professional program was officially opened by László Domokos, President of the State Audit Office of Hungary, on 18 October. “Relying on its sound professional background and audits that create added value, the mission of the State Audit Office of Hungary is to contribute to the transparent and reliable use of public funds and thus to a well-governed State”, said the President. Audits of companies owned by local authorities, which was the theme of the Seminar, had been designed to serve these objectives, and in the context of such audits, the State Audit Office of Hungary had audited nearly two hundred municipal companies in recent years, said the President of the SAO.

 


The international seminar’s professional program was held in two sessions. In the first session, participants discussed the practical experience acquired during the financial and compliance audits of companies owned by local authorities, and then the topic of performance audit of these companies was discussed. Participants could learn about the audit experience of their French, German, Austrian, Russian and Hungarian colleagues. The sections were facilitated by Dr. Gyula Pulay, Director of the State Audit Office of Hungary, and Christian Melly, Head of the Audit Office of the Canton of Valais, Switzerland.

 

 

 

In her presentation, Dr. Júlia Valastyánné-Vízhányó, Head of Audit of the State Audit Office of Hungary, provided a broad overview of the audit experience acquired in Hungary in the audit of companies owned by local authorities. She said that the SAO had a headline target of contributing to the regular, transparent and effective operations of companies owned by local authorities. Azat Valeev, representative of the Chamber of Accounts of the Republic of Tatarstan, delivered a presentation on the local auditing experience acquired in connection with publicly owned companies. He presented the audit approach taken and the experience acquired by the Chamber of Accounts of the Republic of Tatarstan from planning methodology to the use of reports.

 

 

 

 

In his speech, Dr. Walter Wallmann, President of the Court of Audit of the Federate State of Hesse, Federal Republic of Germany, presented the legal and regulatory environment in Germany with regard to companies owned by local authorities, and the regulations to be observed when incorporating such companies. This area is of major importance, particularly in large cities, as these entities carry out a significant part of municipal functions, emphasised the speaker. Ferdinand Wagner, Head of the Municipal Investments Department of the Court of Audit of Rhineland-Palatinate, shared with the audience his institution’s audit practice and experience related to audits of companies in which the municipality has a stake. He said that the audited companies were engaged in the provision of public services such as drinking water supply, public transport, and operation of ports, museums, airports and parking spaces.

 

 

Werner Alteneichinger, representative of the Court of Audit of the City of Vienna, delivered a presentation at the EURORAI Seminar on his experience concerning the audit of municipal companies. The speaker highlighted that several risks had been identified in Germany in the audits of municipal holding companies. Franz Seitelberger, auditor of the Court of Audit of the Federate State of Salzburg, delivered a presentation on the auditing of the supervision of local tourist associations. The Austrian audit expert explained the weaknesses identified with regard to the supervisory functions and the proposals for their elimination.

 


Alastair McQuaid, Performance Audit Manager of the Wales Audit Office (WAO) spoke at the seminar about the challenges faced by the Welsh Government with regard to indirect services financed through public funds. The presenter stressed that the primary purpose of his presentation was to promote a constructive discourse based on evidence from previous WAO audits. Peter Worsdale Audit Manager and International Relations Manager, and Derek Hoy Senior Auditor, representatives of Audit Scotland, presented the audit experience acquired in auditing companies incorporated by Scottish municipal councils. They mentioned that, in 2018 for the first time, Audit Scotland had conducted comprehensive performance audits of so-called “arm’s length entities” and published the relevant report in May 2018.

 

 

Zian Roch, a Senior Officer of the Regional Audit Chamber of Île-de-France, in his presentation explained that it was time to further develop the complex audit mechanisms used in the case of French municipal companies. The French speaker presented the local audit experience and findings through nine audit examples.

 

 

The State Audit Office of Hungary is actively involved in the activities of EURORAI, and is also a member of the Task Force on Municipality Audit (TFMA) of the European Organisation of Supreme Audit Institutions (EUROSAI). As there are significant overlaps between the topics covered by these two international cooperation projects, on the SAO’s initiative, representatives of the EUROSAI Task Force also participated in the EURORAI Seminar. Thus, this prestigious international event was attended by 180 experts from nearly 70 supreme audit institutions in 25 countries.

 

Bálint Horváth
Department of Communication and Public Relations