LAWON THE STATE AUDIT OFFICE("Official Herald of the RS", No. 101/2005 and 54/2007) |
Article 1
The present Law shall regulate the establishment and activities, the legal status, the jurisdiction, the organization and the way of work of the State Audit Office (hereinafter referred to as: the Office), and other matters relevant to the Office's work, as well as rights and duties of the audit subjects.
Article 2
The terms applied in the present Law shall have the following meaning:
1) The Financial Report Audit Procedure shall be the examination of documents, deeds, reports and other information for the purpose of collecting sufficient, adequate and relevant evidence in order to express opinion whether the audit subject's financial reports present its financial situation, business results and money flows accurately and objectively, in accordance with accepted accounting principles and standards;
2) The Business Audit Procedure in terms of the present Law shall mean the collection of sufficient, adequate and relevant evidence in order to express opinion on regularity and appropriateness of the budget beneficiaries' business activities;
3) The Business Regularity Audit Procedure shall mean the examination of financial transactions and decisions concerning revenues and expenditures in order to define whether respective transactions have been executed in compliance with law, other regulations, vested authorizations and for planned purposes;
4) The Business Appropriateness Audit Procedure shall mean the examination of budget and other public funds expenditure, for the purpose of collecting sufficient, adequate and relevant evidence in order to file a report whether the audit subject has used funds in compliance with economy, efficiency and effectiveness principles, and/or in accordance with planned goals;
5) The Economy Principle shall imply the minimal fund cost for a specific activity, ensuring the expected quality is not jeopardized;
6) The Efficiency Principle shall be the relation between the achieved results in producing goods or supplying services and the resources used for the production of goods and/or for the service supply;
7) The Effectiveness (Successfulness) Principle shall be the intended goals level of achievement, as well as relation between the specific activity's planned and achieved effects;
8) The Audit Subject's Business Activities in the audit procedure in terms of the present Law shall be the following:
(1) all audit subject's activities affecting its revenues, and/or expenditures, including assets, i.e. obligations towards fund sources (micro business activities);
(2) all audit subject's activities affecting the condition of the public property, the condition of the public debt, the security of public goods or the environment condition (macro business activities);
9) The Audit Result shall be the set of determined facts and findings based on evaluation of a specific segment of the audit subject's business activities;
10) The Authorized Person shall be any representative authorized by the President of the Office, in a written form, to practice duties in respect with the vested authorization or to perform activities;
11) The Correction Measure shall be the measure undertaken by the audit subject in order to remove the specific irregularity or unsuitability in its business activities or in order to lessen the risk of emergence of a specific irregularity or inappropriateness in its future business activities;
12) The Irregularity in Business Activities shall mean the uncoordinability between business activities and regulations or tendencies the audit subject is obliged to respect in running its business activities;
13) The Inappropriateness in Business Activities shall be the collective expression for uneconomical, inefficient and unsuccessful business activities.
The Legal Status of the Office
Article 3
The Office shall be the highest government agency conducting the audit procedure of the public funds in the Republic of Serbia (hereinafter referred to as: the Republic).
The Office shall be an autonomous and independent government agency.
The Office shall be responsible to the People's Parliament of the Republic of Serbia (hereinafter referred to as: the Parliament) for performing duties from its jurisdiction.
Decisions adopted by the Office in the course of running its audit activities shall not be the subject of proceedings before the courts and/or other government agencies.
The Office shall have the status of a legal entity.
The Office shall have its seal, in accordance with law.
The Office Seat. The Office Organizational Units
Article 4
The seat of the Office shall be in Belgrade.
The Office may establish organizational units outside its seat.
Organizational units outside the Office seat shall not have the status of a legal entity.
Article 5
Within its jurisdiction, the Office shall perform the following assignments:
1) it shall plan and conduct the audit procedure, in compliance with the present Law;
2) it shall adopt bylaws and other regulations for the purpose of implementing the present Law;
3) it shall submit reports in accordance with the Articles 43 and 44 of the present Law;
4) it shall take stances and give opinions, and other forms of public statements, in regard with the implementation and enforcement of particular provisions of the present Law;
5) if necessary and in line with its abilities, it shall provide professional aid to the Parliament, to the Government of the Republic of Serbia (hereinafter referred to as: the Government) and to other government agencies in regard with particular significant measures and important projects, in a manner not lessening the Office independence;
6) it may advise the budget beneficiaries;
7) it may make remarks on draft laws and other regulations and it may give opinions on issues concerning public finances;
8) it may issue recommendations to amend current laws on the basis of information collected during the audit procedure, providing those information produce or may produce negative impacts or lead to unplanned results;
9) it shall adopt and publish audit standards in regard with public funds related to conducting the Office audit jurisdiction, related to audit guide-books and to other professional literature significant for improving the audit profession;
10) it shall define education program and examination program for earning the State Auditor and the Authorized State Auditor titles, it shall organize sitting for an examination for earning the State Auditor and the Authorized State Auditor titles and it shall run the Index of persons who have earned those titles;
11) it shall define criteria and it shall validate professional titles earned abroad which are falling under the Office jurisdiction;
12) it shall cooperate with international audit and accounting organizations in areas related to accounting and audit of the public sector;
13) it shall perform other tasks defined by law.
Article 6
The Office shall have the Book of Rules which shall closely regulate the way and the procedure the Office conducts its audit competence, the way the Office ensures the publicity of its work, the decision-making process and other issues defined by the present Law that are relevant for the Office work, all this in accordance with the present Law.
The Council shall adopt the Book of Rules with previously obtained consent from the Parliament.
The Office may define organization and its way of work by other acts, too.
The According Application of Other Legal Regulations
Article 7
If in the course of implementing the Office audit jurisdiction an issue not defined by the present Law shall arise, the regulations of the law defining administrative procedure shall accordingly apply.
Article 8
The Book of Rules and other Office acts in harmony with the present Law shall be published in the "Official Herald of the Republic of Serbia".
The Object of the Audit Procedure
Article 9
The object of the audit procedure in line with the present Law shall be the following:
1) incomes and costs in accordance with regulations defining budget system and regulations defining public revenues and expenditures;
2) the audit subject's financial reports, financial transactions, accounts, analyses and other records and information;
3) the audit subjects' business activities regularity stipulated by law, other regulations and vested authorizations;
4) the appropriateness in managing public funds on the whole or in a particular segment;
5) the financial management system and the budget control system and systems of other bodies and organizations as subjects of the Office audit procedure;
6) the audit subject's system of internal controls, internal audit, accounting and financial procedures;
7) the audit subject's acts and activities which are producing or may produce financial effects on the budget beneficiaries' revenues and expenditures, on the state property, on contracting debts and providing securities, as well as on appropriate use of funds at the disposal of the audit subjects;
8) the regularity of work of management officials, administration officials and other persons in charge of planning, conducting and monitoring the budget beneficiaries' business activities;
9) other segments defined by particular laws.
The Office may audit the budget beneficiary's act on previous, current and planned business activities.
An act from mentioned in the above paragraph may be an act defined by law or it may be a particular accounting statement, i.e. report, the budget beneficiary must compose upon the Office request.
Article 10
The audit subjects in terms of the present Law shall be he following:
1) the direct and indirect beneficiaries of the Republic budget, territorial autonomies budgets and local authorities budgets, in accordance with regulations defining the budget system and system of public revenues and expenditures;
2) the mandatory social insurance organizations;
3) the budget funds founded by other law or bylaw;
4) the National Bank of Serbia in a part of its operations related to the budget beneficiaries and to managing the state budget;
5) the public companies, companies and other legal entities founded by direct and/or indirect budget beneficiary;
6) the legal entities where direct and/or indirect budget beneficiaries participate in their capital and/or in their management;
7) the legal entities founded by legal entities where state participates in their capital and/or in their management;
8) the legal entities and individuals receiving subsidies and other non-returnable allowances or guarantees from the Republic, from territorial autonomies and from local authorities;
9) the subjects dealing with accepting, keeping, issuing and using the public reserves;
10) the political parties, in accordance with law defining political parties finances;
11) the European Union fund beneficiaries, users of donations and aids from international organizations, foreign governments and non-government organizations;
12) the contract parties in regard with enforcing international treaties, agreements, conventions and other international acts, when such an activity has been defined by the international act or when the authorized authority orders so;
13) other subjects using funds and property under control and at the disposal of the Republic, territorial autonomies, local authorities and mandatory social insurance organizations.
The audit subjects mentioned in paragraph 1 of the present Article shall be considered as the budget beneficiaries in terms of the present Law.
The audit subject's business activities mentioned in paragraph 1 of the present Article the audit opinion relates to shall be obliged to consider such an opinion and to undertake activities for removing determined irregularities and inexpediencies.
Legal Entities Linked with the Audit Subjects
Article 11
Additionally and in line with the present Law, the Office may also audit business activities of legal entities that are doing business with the audit subjects mentioned in the Article 10 of the present Law.
The audit procedure of business activities of legal entities mentioned in paragraph 1 of the present Article shall be conducted only in regard with their business activities that are linked with the audit subjects, as defined by the present Law.
The Office shall adopt an act in which it shall closely regulate the procedure for conducting audit of legal entities mentioned in paragraph 1 of the present Article and thus have their rights protected in regard with such an audit procedure.
III ORGANIZATION AND COMPOSITION OF THE OFFICE
Article 12
The Office shall have the President of the Office, the Vice-President, the Council, the audit services and the accompanying services.
The scope of work and the manner of conducting the Office services tasks, the internal organization and systematization of job positions shall be closely regulated by the separate Office act adopted by the Council, following the proposal coming from the President of the Office.
Article 13
The Council shall be the highest body of the Office.
The Council shall be the collective organ.
The Council shall have five members: the President, the Vice-President and the three members.
The President of the Council shall be the President of the Office at the same time.
The Council shall decide at sessions presided by the President of the Council or the Vice-President that is replacing him/her.
The Council shall decide by majority of votes of all members.
When making decisions, the Council members may not jeopardize their own independence or the Office independence.
The Book of Rules of the Office Council shall closely regulate matters related to the Council work.
The Council shall adopt an act mentioned in paragraph 8 of the present Article.
Article 14
The Council shall conduct the following activities:
1) it shall adopt the Book of Rules;
2) it shall adopt the annual audit program;
3) it shall adopt an act that shall closely regulate the audit procedure;
4) it shall adopt the Office financial plan;
5) it shall conduct the Office Final Account Statement;
6) it shall decide upon objections voiced by the audit subject against proposal report on the conducted audit procedure;
7) it shall adopt the annual report and separate reports;
8) it shall adopt other Office acts and it shall conduct other activities defined by the present Law and by the Office acts.
Article 15
The Council members shall participate in the work and in the decision-making process of the Council, they shall monitor the activities of particular audit units in the Office, they shall participate in the process of work of audit services and they shall conduct other activities vested by the President of the Council.
The Conditions for Appointing the Council Members
Article 16
The appointed Council member may be the citizen of the Republic of Serbia who, besides meeting general conditions determined by the law defining the work in government agencies, shall also meet the following conditions: a faculty diploma, a minimum ten years of work experience, with at least five years of work at posts linked with the Office jurisdiction.
At least two Council members shall be the graduated economists with appropriate audit or accounting knowledge.
At least one Council member shall be the graduated lawyer who has passed the bar examination.
The Incompatibility of Functions
Article 17
The function of the Council member shall not be compatible with the following:
1) with the function in the government agency, in local authorities agencies or public agencies bodies and with the function in political parties or unions;
2) with the work in the government agency, in local authority agency or public agencies' body;
3) with the membership in the management board or monitoring board of a company, public company, fund, mandatory social insurance organization or other legal entity with state capital;
4) with the ownership interest in legal entities falling under the Office jurisdiction, in line with the present Law;
5) with conducting other activities which are incompatible with performing public function, according to law;
6) with conducting other activities which could have negative impact on the Council member's autonomy, impartiality and social reputation, as well as on the Office credibility and respect;
7) with conducting any other paid activities, except scientific and educational ones, only if such activities are not in a moral collision with performing the duty of the Council member.
The Council members shall be subjects to commitments and prohibitions determined by law defining the conflict of interests when performing public functions.
The Council member shall inform the Council about facts mentioned in paragraph 1 of the present Article.
The Inadmissible Mutual Relations between the Office Officials and with the Audit Subjects
Article 18
The Council members shall not mutually be direct blood relatives in linea directa, collateral relatives up to the fourth degree of the relationship, spouses, in-law relatives up to the second degree of the relationship, even in case the marriage has been terminated, they shall not be the guardian, adoptee, adopter and/or foster-parent to each other.
The Council member shall not participate and make decisions in the audit procedure if he/she was engaged as an employee for the audit subject or if he/she was performing specific tasks for the audit subject, providing that five years have not passed since that employment or performance.
The Council member shall promptly inform the Council about facts mentioned in paragraphs 1 and 2 of the present Article.
The Appointment of the President, the Vice-President and the Council Members
Article 19
The Parliament shall appoint and remove the President, the Vice-President and the Council members by majority of votes of all people's deputies, following the proposal coming from the Parliament's competent working body. The Parliament's competent working body shall examine the candidacies, it shall determine whether conditions stipulated by the present Law have been met, it shall determine the list of candidates and it shall deliver it to the Parliament. The candidacy proposal shall be well explained, with attached candidate's written statement of accepting the candidacy.
In case the proposed candidate for the post of the President, the Vice-President and the Council members shall not get the needed majority of deputies' votes, the Parliament's competent working body shall determine the proposal for the new candidate.
Following the appointment, the President, the Vice-President and the Council members shall take an oath before the Parliament, thus taking on the duty. The oath shall be as follows: "I hereby swear to allegiance to the Republic of Serbia. I promise to respect the Constitution and laws. I swear with my honour I shall conduct my duties independently, decently and impartially and I shall not abuse my competencies".
The Mandate of the Council Members
Article 20
The Council member shall be appointed for a period of five years.
The appointed Council members may be appointed twice at the most.
The President of the Council shall inform the President of the Parliament's competent working body on termination of a mandate of the Council member not later than six months prior to mandate expiration.
The Council member whose mandate has expired for other reasons than for those defined in the Article 22 of the present Law may perform his/her function until the new Council member is appointed.
The Termination of Mandate of the Council Member
Article 21
The Council member shall have his/her mandate terminated before the expiration if he/she submits resignation, if he/she meets retirement requirements or if he/she is removed.
Article 22
The Council member shall be removed in the following situations:
1) if he/she was effectively sentenced by appropriate court to unconditional imprisonment to a period not shorter than six months, or to a shorter period, but for a crime which makes him/her unworthy to perform a function;
2) if he/she was effectively deprived of capability to work by appropriate court's decision;
3) if he/she takes on job position or function incompatible with the function of the Council member;
4) if he/she does not act in line with the Constitution and law.
The Procedure for Determining Reasons for Removal
Article 23
The Council shall immediately inform the Parliament if reasons for termination of a mandate or removal shall occur.
The initiative for removing the Council member shall be submitted by at least 20 people's deputies.
The initiative shall be submitted in writing, with explanation and evidence on reasons mentioned in the Article 22 of the present Law.
The Parliament's competent working body shall examine the initiative.
The Council member whose removal is on agenda shall be entitled to turn to members of the Parliament's competent working body, in writing or verbally, at the session where initiative on his/her removal is being examined.
Once the discussion and the voting is over, the Parliament's competent working body shall file a report to the Parliament with the proposal for the Parliament to adopt a decision on either removing the Council member from duty or on dismissing the initiative.
The Council member shall have his/her mandate and all other affiliated rights terminated on the day when the Parliament shall adopt a decision on his/her removal.
Article 24
The Parliament's competent working body may self-initiatively propose to the Parliament to remove the Council member from duty when it determines the removal reasons mentioned in the Article 22 of the present Law have occurred, this being based on a continuous monitoring of the Council work in accordance with law or based on other findings.
In a procedure when the Parliament's competent working body has self-initiatively proposed to remove the Council member, the provisions of the Article 23 paragraph 5 shall apply.
Article 25
The President of the Office shall be the General State Auditor and head of the Office.
As a General State Auditor, the President of the Office shall have the following competencies:
1) he/she shall approve and direct the Office activities by defining and implementing the work program and by signing the Office acts;
2) he/she shall issue rules and adopt directives and instructions for implementing particular audit procedure phases;
3) he/she may ex officio order monitoring on implementation of audit assignments, and, concerning this, it may adopt a decision on monitoring;
4) he/she shall propose the Examination Commission members;
5) he/she shall sign certificates for earning the audit titles of the State Auditor and the Authorized State Auditor;
6) he/she shall have other competencies and shall perform other duties in line with the present Law.
As a head official, the President of the Office shall have the following competencies:
1) he/she shall propose the annual financial plan to the Council;
2) he/she shall submit the annual report and separate reports on Office work to the Council;
3) he/she shall be the order-issuing authority for the Office resources;
4) he/she shall decide on labour issues in the Office and shall adopt decisions related to this matter;
5) he/she shall order job assignments in the Office and may adopt decisions related to this matter;
6) he/she shall have other competencies and shall perform other duties defined by law.
The Vice-President of the Office
Article 26
The Vice-President of the Office shall:
1) perform duties of the General State Auditor upon receiving such an authorization from the President of the Office;
2) replace the President of the Office in case of his/her temporary prevention;
3) in case of a premature termination of the function of the President of the Office, he/she shall perform the function of the President until the new President is appointed;
4) perform other assignments vested by the President of the Office.
In case the Vice-President of the Office is absent or prevented from performing his/her activities, the oldest Council member shall replace him/her.
Article 27
For the position of the Supreme State Auditor may be appointed a person who meets general conditions for entering employment in government agencies, who has a faculty diploma and who holds the Authorized State Auditor title, in line with the present Law. A person with minimum 10 years of working experience, with at least eight years of experience at posts linked with the Office jurisdiction, shall be considered as if having the appropriate experience for the position of the Supreme State Auditor.
Following the proposal coming from the President of the Office, the Office Council shall appoint, and remove, the Supreme State Auditor for a period of six years, with the option to be re-appointed.
The Supreme State Auditor shall commence his/her duty the moment he/she takes an oath mentioned in the Article 19 paragraph 3 of the present Law before the Office Council.
The Supreme State Auditor shall run the audit service and conduct the audit procedures from the Office jurisdiction, in accordance with the present Law and in accordance with authorizations vested by the President of the Office.
The Supreme State Auditor shall be responsible for his/her work to the President of the Office.
The Office shall adopt an act defining the number of Supreme State Auditors the Office shall have.
The State Auditors – the Audit Titles
Article 28
The State auditors shall perform the audit procedure assignments.
The audit titles shall be: the State Auditor and the Authorized State Auditor.
The audit titles shall be earned in accordance with the present Law, as well as in accordance with the international practice of auditors' education.
The State Auditor and the Authorized State Auditor shall be the independent experts in hold of the state auditor and/or the authorized state auditor certificates who meet other requirements stipulated by the present Law.
Before taking the examination, a candidate for the state auditor and the authorized state auditor titles shall pass the specialists' examination for work in government agencies, unless exempted from it in accordance with provisions of the law referring to public servants.
A person meeting the following conditions may earn a certificate for the state auditor title:
1) if he/she holds a special knowledge to conduct the audit procedure assignments in line with the present Law;
2) if he/she has appropriate working experience;
3) if he/she has passed the examination for the state auditor title.
A person meeting conditions mentioned in items 1) to 3) of paragraph 6 of the present Article which has passed the examination for the authorized state auditor title may earn a certificate for the authorized state auditor title.
Certificates on earning audit titles mentioned in paragraph 1 of the present Article shall be public documents.
The Council shall closely regulate conditions for earning and revoking the audit titles, for organizing and running the audit titles examinations and for issuing the audit titles certificates.
An act mentioned in paragraph 9 of the present Article shall be published in the "Official Herald of the Republic of Serbia".
Article 29
An examination for earning the audit titles of the state auditor and/or the authorized state auditor shall be taken in accordance with the program adopted by the Council and published in the "Official Herald of the Republic of Serbia".
The ministry in charge of finances, the ministry in charge of state administration and other subjects the Council estimates to be able to contribute, may participate in making a program mentioned in paragraph 1 of the present Article.
The Office may entrust the implementation of the education program for earning the audit titles to other competent professional organization.
An examination for earning the audit title of the state auditor and the authorized state auditor shall be taken before the Commission appointed by the Council, upon a proposal coming from the President of the Office.
A person who shall pass the examination defined in paragraph 4 of the present Article shall earn the audit title of the state auditor and/or the authorized state auditor, and shall be registered into a Title Records within the Office.
The Office shall issue certificates for the audit titles of the state auditor and the authorized state auditor.
Article 30
Provisions of the Articles 17 and 18 of the present Law shall accordingly apply to the Supreme State Auditor, the Authorized State Auditor and the State Auditor.
The Council shall make a decision on exempting persons defined in paragraph 1 of the present Article.
Article 31
The Office shall have the audit procedure services and accompanying services.
The President of the Office shall appoint the managers of the services defined in paragraph 1 of the present Article.
The Office act shall closely regulate the work-flow, competence, organizational structure, systematization of job positions and other rights and duties of persons employed at the Office services defined in paragraph 1 of the present Article.
Article 32
The Office shall have the Secretary who shall coordinate the work of the Office accompanying services, who shall run the Office activities and who shall perform other duties in line with regulations and in accordance with the President of the Office authorizations.
The President of the Office shall appoint, and remove, the Office Secretary for the period of six years, upon running a public job contest, with the re-appointment option.
A person who meets general job requirements for work in government agencies, who is a graduated lawyer or graduated economist, who has passed the specialized examination for work in government agencies and who has at least eight years of working experience in the profession, may be appointed for the position of the Office Secretary.
The Office Secretary shall be responsible to the President of the Office for his/her work.
The Office Secretary shall attend the Council sessions without the right to vote.
Article 33
In case the audit procedure requires particular specialist's knowledge the Office does not have, the Office may hire free-lance experts for the purpose of conducting particular assignments from its jurisdiction.
The Office free-lance expert shall have the appropriate expert knowledge and experience.
The free-lance expert may be an individual or a legal entity.
The Office may hire a foreign citizen as a free-lance expert, providing he/she is a recognized expert in the field relevant for conducting the Office duties.
The Office free-lance expert shall earn such a status by registering in the Office List of Free-Lance Experts, on the grounds of the Council's decision.
All the working documents made by the free-lance expert shall be at disposal of the Office and it shall belong to the Office.
The Office shall be held responsible for the audit findings that are based on free-lance expert's opinion and inspection.
The provisions of the Articles 17 and 18 of the present Law shall accordingly apply to free-lance experts.
Article 34
The Office shall conduct its audit jurisdiction in compliance with universal audit principles and rules and in harmony with selected internationally recognized audit standards.
The Office shall publish the Serbian translation of standards mentioned in paragraph 1 of the present Article and other professional regulations in the "Official Herald of the Republic of Serbia".
The Office shall be authorized to translate selected internationally recognized audit standards mentioned in paragraph 1 of the present Article and other professional regulations and to publish it in the "Official Herald o the Republic of Serbia".
Article 35
The Office shall conduct the audit procedure on the grounds of the annual audit program that must be adopted before the end of the year for the following calendar year.
Within the frame set by law, the Office shall autonomously decide on audit subjects, on object, volume and nature of audit procedure, beginning and duration of audit procedure, unless otherwise specified by the present Law.
The audit program shall every year compulsorily include the following:
1) the Budget of the Republic of Serbia;
2) the mandatory social insurance organizations;
3) the appropriate number of local government units;
4) the National Bank of Serbia activities related to use of public funds;
5) the appropriate number of public companies, companies and other legal entities established by a direct or indirect budget beneficiary, and/or the mentioned legal entities in which the budget beneficiary has its share of ownership, i.e. management.
The Office may modify and supplement the audit program mentioned in paragraph 1 of the present Article during the calendar year.
In case it becomes necessary for conducting the audit program, the Office may hire auditors from foreign state audit offices and/or commercial audit companies.
For the purpose of conducting its audit program, the Office may use reports on conducted audit procedure issued by commercial audit companies, i.e. it may plan additional procedures for audit subjects on the grounds of such reports.
The Office shall be responsible for the audit findings in case it uses reports defined in paragraph 6 of the present Article.
The Auditor's Free Access to the Audit Subject's Documents
Article 36
The audit subject shall place at auditors' disposal all requested data and documents, including confidential data and documents that are necessary for planning and conducting the audit procedure. The audit subject shall also deliver the requested data to the Office during the year, i.e. at the pace set by the detailed audit plan and in deadlines set by the Office authorized person.
The audit subject shall enable the Office or its authorized person to have access to confidential documents or business secret documents, in line with law.
If requested so, the audit subject shall hand over the copy of the database to the Office auditor.
The Collection of Information Prior to Commencing the Audit Procedure
Article 37
Prior to commencing the audit procedure, the Office may request the budget beneficiary to submit all information that are considered necessary, accounting documentation, data and other documentation, as well as to conduct other examinations necessary for planning or conducting the audit procedure.
The request to submit data mentioned in the previous paragraph of the present Article shall be met within eight days from the day the request was delivered.
The Commencing of the Audit Procedure
Article 38
The Office shall commence the audit procedure by adopting a decision on conducting the audit procedure.
It shall be allowed to file a complaint against the decision on conducting the audit procedure. The recipient of the decision may file a complaint within eight days from the day the decision was delivered.
The Council shall decide on a complaint, by dismissing it, refusing it or accepting it as grounded.
The complaint is grounded if it turns out the audit procedure is not under the Office jurisdiction.
There shall be no complaint allowed against a decision on dismissal.
The budget beneficiary who has received the decision on conducting the audit procedure (hereinafter referred to as: the audited person) shall allow the Office authorized persons to conduct an examination in order to accomplish the audit procedure goals (hereinafter referred to as: to conduct the audit procedure).
To conduct the audit procedure shall include the following:
1) inspection of a system and particular subsystems of business activities and systems of internal controls and accounting;
2) inspection of accounting documents and other documents related to business activities and financial reports of the audited person;
3) inspection of premises, objects and instruments of labour the audited person is using for its business activities;
4) other audit inspections and activities necessary for accomplishing the audit goals and for estimating the business appropriateness.
In case the Office authorized person shall discover materially significant activity, i.e. documentation, while inspecting the audit subject and such a discovery shall point to a crime, the Office authorized person shall list, seize and secure such documentation, but maximally up to eight days. A receipt on a seizure shall be issued.
The Office shall immediately inform the competent authorities on activities and documentation mentioned in previous paragraph of the present Article.
In case the audited person shall not allow the Office authorized persons to commence the audit procedure within a period of 15 days upon receiving a decision on conducting the audit procedure, or if, during the audit procedure, the Office authorized persons estimate the audited person does not show sufficient willingness to cooperate in conducting the audit procedure, the Office shall issue an order to have the necessary documents delivered, and the audited person must obey such an order. The Office may adopt several supplements along with an order to have the documents delivered.
There shall be a deadline of eight days to act upon the order to have the documents delivered, starting from the day the order was delivered.
The Termination of the Audit Procedure
Article 39
Once the audit procedures at the audited person's are conducted, the Office shall draft a report on the conducted audit procedure and deliver it to the audit subject and to persons responsible for examined business activities from the period the audit procedure relates to (hereinafter referred to as: the responsible persons). In its audit report, the Office shall place its opinion on the audited person's business activities.
The audit subject, i.e. the responsible person, shall have the right to file an explained complaint against a draft report on the conducted audit procedure within a period of 15 days from the day the draft was delivered.
The Office shall examine the legitimacy of objections mentioned in the complaint and within the period of 15 days from the day the complaint was received it shall invite the audited person's responsible persons to the discussion about the audit draft report, and those persons shall be allowed to submit new evidence within a given deadline.
The discussion mentioned in paragraph 3 of the present Article shall not be necessarily held in case the audit subject informs in writing the Office, within a period of 15 days from the day the audit draft report was delivered, that it shall not challenge any of the findings from the draft.
There may be several discussions about the audit draft report. The first one shall be held the minimum eight days and the last one the maximum 30 days after the day the audit draft report was delivered.
The Office authorized person shall run the meeting at which the discussion about the audit draft report shall take place and, as a rule, such a meeting shall be held at the audit subject's premises.
In case the audit subject's representative does not take part in the discussion, it shall be considered as if he/she did not challenge any of the audit draft report findings, unless the representative, within a period of three days from the discussion day, proves that he/she did not take part in the discussion for a justified reason.
During the discussion, the audit subject's representative may:
1) challenge individual audit draft report findings;
2) provide explanations and additional evidence in order to challenge the audit findings.
In case the Office shall find the challenge against the audit finding to be grounded, than such a finding shall be excluded from the audit report, with the option to previously run additional audit inspections.
Explanations mentioned in item 2 paragraph 8 of the present Article may be included into the audit report.
Once the discussion is completed, the Office authorized person shall deliver to the Council member or to the competent Supreme State Auditor the draft audit report with possible objections coming from the audit subject. The Council member or the competent Supreme State Auditor shall examine the audit report and it shall determine whether objections are grounded and whether findings are based on evidence found in documents, and/or whether procedure was conducted in accordance with audit procedure standards. After estimating objections and findings, the Council member or the competent Supreme State Auditor shall define the proposal audit report which shall be delivered to the audit subject and responsible persons, within a period of 30 days from the day the discussion was completed.
In case the discussion about the draft audit report is not necessary (paragraph 4 of the present Article), the Council member or the competent Supreme State Auditor shall define the proposal audit report within a period of 15 days from the day the audit subject's information on not challenging any of the findings from the draft audit report is received.
The audit subject, i.e. the audit subject's responsible person from the time the conducted audit procedure relates to, may file a complaint against the audit findings from the proposal audit report. A complaint shall be filed to the Office within a period of 15 days and such a period shall begin the day after the proposal audit report was delivered to the audited person, i.e. to the audit subject's responsible person from the time the conducted audit procedure relates to.
The President of the Office may decide to obtain the Office free-lance expert's opinion about a particular part or about the whole proposal audit report.
In case the audit finding from the proposal audit report has been challenged (a complaint mentioned in paragraph 13 of the present Article) or if against the free-lance expert's opinion mentioned in the previous paragraph of the present Article the doubt has been raised, such a finding shall be considered as challenged.
The Council shall decide on the challenged finding from the proposal audit report within a period of 30 days from the day the complaint mentioned in paragraph 13 of the present Article has been received. The Council may decide the following:
- it may decide to omit the challenged finding from the audit report;
- it may decide to leave the challenged finding as an integral part of the audit report in unmodified form;
- it may decide to include the challenged finding in the audit report with the content defined by the Council itself.
The audit report shall be delivered:
1. to the audit subject;
2. to the audit subject's responsible person from the time the conducted audit procedure relates to;
3. to the Parliament;
4. to other authorities the Council estimates should be informed about the audit findings.
In case the audit subject, i.e. the audit subject's responsible person from the time the conducted audit procedure relates to, has filed a complaint against the audit findings from the proposal audit report, than he/she shall receive the reply on the complaint along with the audit report. The Council shall define the reply on the complaint.
There shall be no legal remedy against the reply mentioned in paragraph 18 of the present Article.
The draft audit report and the proposal audit report shall be confidential.
The Procedure after Conducting the Audit Procedure
Article 40
The audit subject whose business activities were discovered to be irregular or inappropriate and were not removed during the audit procedure shall submit a report on removing discovered irregularities or inappropriate activities to the Office (hereinafter referred to as: the responding report), except in a case mentioned in paragraph 3 of the present Article. The audit subject shall submit such a report within a deadline given by the Office, in the range from 30 to 90 days, starting from the day after the day the audit report was delivered.
The responding report shall be made in writing, it shall be signed and verified with the audit subject's authorized person's seal. This document, if necessary, shall be subject to the Office veracity check. The responding report shall have the status of a public document.
The responding report shall not be necessary if the audit report mentions that adequate measures and activities for the purpose of removing discovered irregularities and inappropriate activities have already been conducted during the audit procedure.
The Office may check the responding report's veracity by comparing it with the audit results.
In case the Office shall estimate the responding report does not show the discovered irregularities or inappropriate activities have been removed in a successful way, it shall be considered as if the budget beneficiary has violated the obligation to run a proper business. If at stake was unsatisfactory removal of a significant irregularity or significant inappropriate activity, it shall be considered as a hard case of violation of the obligation to run a proper business.
The violation, i.e. the hard case of violation of the obligation to run a proper business by the audit subject shall be estimated in accordance with the directives adopted by the Council.
If at stake was a violation of the obligation to run a proper business, the Office may issue a request to undertake measures. Such a request shall be delivered to the authority the Office estimates to have such competencies to be able to undertake measures against the budget beneficiary violating the obligation to run a proper business.
The body the request to undertake measures mentioned in the previous paragraph of the present Article was directed to shall inform the Office about the undertaken measures, i.e. it shall deliver the explanation why measures have not been undertaken, within a period of 30 days from the day the request was received.
If at stake was a hard case of violation of the obligation to run a proper business, the Office shall inform the Parliament about it.
The Parliament's working body in charge of monitoring the budget and other public funds, after conducting a discussion and inviting the budget beneficiary to participate in it, shall adopt a decision on recommendations and measures that should be undertaken because of a hard case of a violation of the obligation to run a proper business, all this within bounds of this body's competence.
If at stake was a hard case of a violation of the obligation to run a proper business or in case of a violation of the provisions of paragraphs 9 and 10 of the Article 38 of the present Law, the Office shall additionally:
1) extend an invitation to remove the responsible person;
2) inform the public.
In an invitation mentioned in item 1 paragraph 11 of the present Article, the Office shall state the name of a person or persons which should be removed. A request for their removal shall be delivered to the authority the Office estimates it may carry out or it may begin the removal procedure.
The authority that has received the invitation to remove the responsible person shall decide on the invitation and shall inform the Office about its decision within a period of 15 days from the day the invitation was received.
Initiating the Misdemeanour and/or Criminal Procedure and Informing the Public Attorney
Article 41
The Office shall immediately approach the competent authority and file a motion to initiate the misdemeanour procedure, i.e. bring criminal charges against a suspect, if in the course of the audit procedure it shall discover materially significant activities indicating there are elements of a misdemeanour, i.e. crime.
The Office shall inform the Public Attorney about cases when the audit subject's activity, and/or activity of a legal entity doing business with the audit subject, has caused damage to the public property.
The authorities mentioned in paragraphs 1 and 2 of the present Article shall inform the Office about their decisions.
Article 42
The Council members, the Office employees and the hired free-lance experts shall keep data and documents which are acquired as evidence in the course of conducting the audit procedure and which are identified as confidential or secret, in line with law. These data shall be considered as official secret and shall be used only when producing a report.
Exceptionally, data and/or documents mentioned in paragraph 1 of the present Article may be exposed to the public on the grounds of the competent court's order, in line with law.
The Office shall keep data and documents identified as confidential or secret in a safe place, in line with the Book of Rules.
The Office shall omit facts and findings identified as a business secret from the report on the conducted audit procedure that shall be open to the public.
Article 43
The Office shall report to the Parliament by submitting:
1) the annual report on its work;
2) the separate reports during the year;
3) the report on the audit procedure of the Republic's Budget Final Account Statement, of the compulsory social insurance organizations' financial plans Final Account Statements and of the Republic's Consolidated Financial Reports.
The Book of Rules shall closely define the content of reports mentioned in paragraph 1 of the present Article.
Reporting to the Parliaments and Local Authorities
Article 44
The Office shall report to the local authorities' parliaments about audit procedures referring to audit subjects falling under their competence.
Reports mentioned in paragraph 1 of the present Article shall be delivered to the Parliament, too.
The Annual Report on Office Work
Article 45
The Office shall submit to the Parliament by March 31 of the current year the annual report on the Office work in the previous year.
Article 46
During the year, the Office may submit to the Parliament the separate reports on especially significant or urgent matters, which, according to the Council's opinion, should not be postponed until the next regular report is supposed to be submitted.
Upon the Parliament's request, the Office shall deliver reports with required information and data, in line with law.
A Report on the Conducted Audit Procedures of the Republic's Budget Final Account Statement, of the Compulsory Social Insurance Organizations' Financial Plans Final Account Statements and of the Republic of Serbia's Consolidated Financial Reports
Article 47
In the process of adopting the Republic's Final Account Statement, the Office shall report to the Parliament on the conducted audit procedure of the Republic's Final Account Statement, of the compulsory social insurance organizations' financial plans Final Account Statements and of the Republic's Consolidated Financial Reports, in accordance with law defining the budget system.
Article 48
Upon examining the Office reports, the Parliament's competent working body shall deliver to the Parliament its stances and recommendations in the form of a report.
Basing its decision on significant facts and circumstances pointed out in reports mentioned in paragraph 1 of the present Article, the Parliament shall decide on the proposed recommendations, measures and deadlines for their implementation.
The Parliament may order the Office to make additional explanations of certain facts and circumstances.
Article 49
The Office work shall be public, in line with law and the Book of Rules.
The Office shall deliver the report on its work to the Parliament at least once a year.
Ensuring the Office Qualitative Work
Article 50
The Office shall ensure the system of controlling its quality of work in accordance with current international audit standards of quality control.
VI REQUIREMENTS FOR OFFICE WORK
Article 51
The Office instruments of labour shall be provided from the Budget of the Republic of Serbia, as a separate budget sector.
The Council shall determine the Office financial plan and deliver it to the Parliament's competent working body for approval.
Upon getting an approval from the Parliament's competent working body, the Office shall deliver the financial plan proposal to the ministry in charge of budget affairs.
The Government shall provide business premises, equipment and necessary instruments of labour to the Office.
The beginning of the Office work may be financed from donations coming from the domestic legal entity which shall not be the audit subject in accordance with the present Law, as well as from international donations intended exclusively for developing the public sector's independent audit procedure.
The Office Final Account Statement
Article 52
The Parliament may adopt a separate act on entrusting the audit of the Office Final Account Statement to the audit company, in line with law defining the accounting and audit procedures.
The Council Members' Labour Law Status
Article 53
The Council member shall have the status of the Office official.
The Parliament shall adopt an act on beginning and an act on terminating the Council member's duty.
The President of the Council shall be entitled to a salary of 90 percent of the Parliament Speaker's salary.
The Vice-President and the Council members shall be entitled to a salary of 90 percent of the Deputy Parliament Speaker's salary.
The regulations defining the rights of appointed persons shall accordingly apply to other rights, duties and responsibilities of the Council members,
The Council member shall not be held responsible for opinion presented in the audit report in a proceeding initiated because of an offence committed in the course of conducting his/her duty, and he/she shall not be taken into custody without the Parliament's approval.
The Supreme State Auditors' Labour Law Status
Article 54
The Supreme State Auditor shall have the status of the Office official.
The President of the Office shall make a decision on beginning and on terminating the Supreme State Auditor's duty.
The Supreme State Auditor shall be entitled to a base salary of 90 percent of the salary of the Vice-President of the Office and of the Council members.
The regulations defining other incomes and rights of the government agencies officials shall accordingly apply to the Supreme State Auditor.
The Office Secretary Labour Position
Article 55
The Office Secretary shall have the status of the Office official.
The President of the Office shall make a decision on beginning and on terminating the Office Secretary's duty.
The Office Secretary shall be entitled to a base salary of 90 percent of the Supreme State Auditor's salary.
The regulations defining other incomes and rights of the government agencies officials shall accordingly apply to the Secretary.
The Office Service Employees' Labour Law Status
Article 56
A person employed at the Office service shall have the same labour status as those employed at government agencies.
The President of the Office shall make a decision on entering and on terminating the employment at the Office.
A person employed at the Office service shall be entitled to have a salary that shall be at least equal to the salary determined in accordance with regulations defining salaries at government agencies.
As a result of specific complexities when working in the Office, the base salary may be increased up to 30 percent (hereinafter referred to as: the Office bonus).
The President of the Office shall adopt an act defining the amount of the Office bonus and modality of calculating it for those employees who are entitled to a bonus.
The regulations defining other incomes and rights of the government agencies employees shall accordingly apply to the Office service employees.
The Misdemeanour Conducted by the Responsible Person
Article 57
A fine of 5.000 to 50.000 dinars shall be pronounced to the audit subject's responsible person for committing the following misdemeanours:
1) if the audit subject was requested to submit data, and it did not comply within a given deadline (the Article 37 paragraph 2 of the present Law);
2) if the audit person was ordered to deliver documents to the Office, and it did not deliver all the documents specified in the order within a given deadline or documents specified in the order supplement (the Article 38 paragraphs 10 and 11 of the present Law);
3) if the audit subject was found to have its business activities irregular or inappropriate, and it did not submit the responding report (the Article 40 paragraph 1 of the present Law) verified by a responsible person within a given deadline (the Article 40 paragraph 2 of the present Law);
4) if the authority had received the Office invitation to undertake measures, and it had failed to submit a report to the Office on undertaking those measures nor did it explain this failure within a given deadline (the Article 40 paragraph 8 of the present Law);
5) if the authority had received an invitation to remove the responsible person, and it failed to decide within a given deadline or if it failed to inform the Office about its decision within a given deadline (the Article 40 paragraph 13).
IX TRANSITIONAL AND CONCLUDING PROVISIONS
The Appointment of the Council Members
Article 58
The appointment of the President, Vice-President and the Council members shall be conducted within a period of six months starting from the day the present Law shall come into force.
The Adoption of the Book of Rules
Article 59
The Office shall adopt the Book of Rules and deliver it to the Parliament for an approval within a period of three months starting from the day the Council was appointed.
The Parliament shall approve with the Book of Rules within a period of three months starting from the day the Book of Rules was delivered to the Parliament.
The Approval of the Office Financial Plan
Article 60
The Office shall deliver to the Parliament's competent working body the Office first annual financial plan for approval within a period of three months starting from the day the Council was constituted.
The Parliament's competent working body shall examine the financial plan mentioned in paragraph 1 of the present Article maximally within a period of 30 days starting from the day it was received.
The Adoption of the Education Program for Earning the Audit Titles
Article 61
The Office shall adopt the examination education program for earning the State Auditor and the Authorized State Auditor titles and it shall appoint the Examination Commission in accordance with the present Law, within a period of two years starting from the day the Council was appointed.
The examination program mentioned in paragraph 1 of the present Article shall be in harmony with international standards, directives and documents related to state auditors' education.
The Appointment of the Supreme Auditors and State Auditors
Article 62
The Supreme State Auditors mentioned in the Article 27 of the present Law and the State Auditors mentioned in the Article 28 of the present Law shall be appointed within a period of six months starting from the day the Council was appointed.
Until the program is adopted and the Examination Commission mentioned in the Article 61 of the present Law is appointed, a person who has not passed the examination for the Authorized State Auditor may be appointed for the Supreme State Auditor position, providing he/she meets other requirements mentioned in the Article 27 paragraph 1 of the present Law and if he/she has passed the specialists' examination for working in government agencies or the specialists' examination for earning the Authorized Auditor or the Authorized Accountant professional titles, in accordance with law defining the accounting and audit procedures.
While establishing the Office and prior to adopting the examination program and appointing the Examination Commission mentioned in the Article 61 of the present Law, a person who has not passed the examination for the State Auditor may be appointed for the State Auditor position, providing he/she, besides meeting general conditions for working in government agencies, meets the following specific conditions: to have the faculty diploma, to command at least one universal language, to have at least five years of experience working at positions linked with the Office jurisdiction and to have passed the specialists' examination for working in government agencies or the examination for earning the Authorized Auditor or the Authorized Accountant professional titles, in accordance with law defining the accounting and audit procedures.
During the process of appointing first Council members mentioned in the Article 16 paragraph 3 of the present Law, the Authorized Auditor or the Authorized Accountant titles shall be recognized, providing the titles have been earned in line with law defining the accounting and audit procedures.
Employees conducting duties of the Supreme State Auditor mentioned in paragraph 2 of the present Article, duties of the State Auditor mentioned in paragraph 3 of the present Article and the Council members mentioned in paragraph 4 of the present Article, shall pass the examination for the State Auditor title within a period of 18 months starting from the day the examination program mentioned in the Article 61 of the present Law was adopted.
In case an employee mentioned in paragraph 5 of the present Article shall not pass the examination for the State Auditor title within a deadline given by the provisions of the paragraph 5 of the present Article, his/her function shall be terminated, i.e. his/her employment at the post requiring this audit title shall be terminated.
The Introductory Program of the Office Work
Article 63
The Office shall deliver to the Parliament's competent working body the Introductory Program of the Office Work within a period of 90 days starting from the day the Council was appointed.
The Introductory Program of the Office Work shall particularly include the following: ensuring the Office instruments of labour; cooperation with international professional and financial organizations on implementation of the present Law; choice of a consultant for the audit procedure training and other activities necessary for commencing the Office work.
Article 64
The Council may hire consultants for the purpose of taking care of state auditors' training lessons, in line with the adopted program and the audit procedure training plan.
The training consultants mentioned in paragraph 1 of the present Article, in the process of performing the audit procedure training, may also conduct the audit of the Republic's Budget Final Account Statement and audit of other audit subjects' business activities on behalf of the Office.
Entry in Force of the Present Law
Article 65
The present Law shall come into force on the eighth day from the publishing day in the "Official Herald of the Republic of Serbia" and it shall be applied within a period of six months from the day of its coming into force.
Independent Article of the Law on Amending the
Law on the State Audit Institution
("Official Herald of the Republic of Serbia", No.54/2007)
Article 3
The present Law shall come into force on the day of its publication in the "Official Herald of the Republic of Serbia".