Annex 15:

3-2PR: Strengthening Capacity-Building of Modern Methods of Budgeting, Audit and Control Systems at Regional Self-Governmental Levels

1. Project description

2.  Project purposes and goals 

The project proposal states that the system of public financial management is the area that will support better use of resources and higher performance of the public sector methods, where both legislation and processes has to be improved. Progress in this area in Slovakia is very slow because of methods of control and auditing and creation of budgets that are not competitive. Because of this, the project focused on improvements in public financial management especially in the area of financial control.

The main goal of the project was to strengthen the system of capacity-building at the self-governmental regional level in the area of budgeting, budgetary control and auditing in the organization of public service, namely the preparation of the manual for the implementation of new methods of public financial management. The main objectives of the project were described as follows:

1. To analyze theoretically modern methods and techniques of budgeting, control/audit in the public sector, and how all-new trends have been applied in developed countries.

2. To examine the current public financial management practices used in Slovakia at the regional self-governmental level and highlight the most important weaknesses of these practices. The focus will be on the old style "brutto” budgeting, procedural audit, ex-post audit, subjective allocation problem, and centralized management of finances.

3. Based on the comparison of all old and new methods of public financial management, preparation of the manual supporting implementation of new methods of financial management (progressive methods of budgeting, control and auditing) in public organizations, with a specific focus on conditions of regional self-governmental subjects in Slovakia.

3. Project realization

No problems occurred during the project realization. The project team actively cooperated with government officials; the project implementation went as planned; the project timeline was kept on target; and all team members and other participants actively cooperated in the project, fulfilling their roles and responsibilities on time and with quality work.

4. Project outputs, outcomes and impacts

The project in Slovakia was realized as planned and its main realization phases were as follows:

1.       The team studied and analyzed all relevant literature focused on modern methods of budgeting and control in the public sector.  

2.       Prof. Meyers from the University of Maryland (an NASPA partner) provided extra readings and materials on the topic, and invested his personal experience to support the processes.

3.       First contact meetings with representatives of the regional self-government were organized, and the contents of the manual was agreed upon. To respect the needs of self-government structures, it was agreed that the main focus will be performance control and public procurement control.

4.       During the manual preparation phase, partners in the Czech Republic were consulted and visited and vice versa. Partnerships were established to train self-government auditors in the area of performance audit. Excepting project partners, new institutions involved were: Masaryk University Brno (Prof. Rektořík), University of Economics Prague – Faculty of Management in Jindřichuv  Hradec and Faculty of Finance and Accounting in Prague. Via this, the project gained a truly international character.

5.       Using analysis and synthesis methods, members of the team drafted the first version of the manual as planned by July 30, 2004. The draft manual took into account the needs of the problematic at the regional and self-governmental levels in Slovakia.

6.       The draft version of the manual was reviewed by all Chief Auditors of regional self-government offices in Slovakia, and their comments incorporated into the contents. On June 9, 2004, team members participated at the official meeting of these Chief Auditors, and agreed on issues of this project as well as forms of future cooperation.

7.       Based on comments, the final version of the manual (main output) was prepared and printed on CD-Rom. The CD-Rom and selected books were provided to all regional self-government offices in Slovakia, and are available for other institutions on request. The manual will be used not only in Slovakia, but also in the Czech Republic for the purposes of self-government. By this standard, the main planned outcome is fulfilled.

Excepting the main output (manual), other important outcomes occurred The project helped to significantly improve contacts between academics and practitioners in the area of audit (a weak point of transitional public administrations systems), and also contacts between schools in Slovakia and the Czech Republic dealing with the issue. New cooperation started with the potential of extensive influence and impacts on the quality of public audit in respective countries.

The University of Matej Bel, Faculty of Economics, Department of Public Economics will benefit from this program, by significant strengthening its teaching and advisory capacities in the areas of budgeting, control and audit in the public sector. The course on financial control, created as the result of the project and supported by regional self-government practitioners, had already been introduced into the curricula.

There is considerable potential for major impacts as, thanks to successful cooperation with regional self-governments, the project will continue in the future. Two forms are envisaged. One is training and lecturing for the purposes of the regional self-government. The preparation and realization of these training courses will be realized in cooperation with regional self-governmental districts who originated the request of the preparation of this manual, and also with all Czech partners. Developed training curricula will be used in the Czech Republic, and experts from both countries will exchange their capacities during delivery of courses. The second line is continuing to further develop the manual, especially the preparation of working guidelines for concrete activities of regional auditors.