Chapter 32: Support to the Governmental Audit Office of EU funds

As part of the activities in the Negotiating Chapter 32, the PLAC III project provided support to the Office for the Audit of the European Union Fund Management System.

The Governmental Audit Office of EU Funds (Audit Authority) was established by the Governmental Decree on establishing the Authority. The Audit Authority is functionally independent of all actors in the management, control and supervision system that was established in the Republic of Serbia for implementation of IPA funds. 

Serbia opened negotiations in Chapter 32 in December 2015. Adequate and efficient institutional establishment and capacities at a national and local level are imperative for the application and implementation of the Union acquis in the field of financial control. Effective financial control represents a key reform step in establishing budgetary discipline and increasing accountability in public funds management. For effective implementation of the reform in this area, one of the key measures is the strengthening of the legislative framework and institutional and operational capacities of the audit authority for auditing EU funds management system.

In December 2022 the European Commission adopted the Implementing Decision on the financing of the annual action plan contributing to the Western Balkans Energy Support Package in favour of the Republic of Serbia for 2023. The new Financial Framework Partnership Agreement between the European Commission and the Republic of Serbia on Specific Arrangements for Implementation of Union Financial Assistance to the Republic of Serbia under IPA III (FFPA) has been agreed.

However, after the verification mission of the structure and authority established by the Republic of Serbia, the auditors of the European Commission, in their Audit Reports, underlined that the Audit Authority should provide and maintain sufficient administrative capacities to ensure the effective protection of EU financial interests, as well as more coordinated management of irregularities, prevention and detection of errors and fraud, both within EU funds and within national funds.

At present, there is ongoing assistance under the PLAC III project aimed at strengthening the institutional structure of the Audit Authority to ensure an effective and efficient system of control and audit of the EU funds with regard to the protection of the EU's financial interest. Among the outputs envisaged, it is expected that the expert provides assessment of the compliance of the current Audit Manual against the requirements of the FFPA and proposes to the Authority amendments to the text needed to close the gap identified.

PLAC III project expert Andra Larin presented the results of the work at the workshop held on December 14 in Belgrade. Workshop was attended by the members of the Audit Authority.

She presented a report on the assessment of legal and administrative shortcomings in relation to the FFPA, as well as a comparative analysis of audit authorities of EU member states (Austria, Bulgaria, Hungary, Slovakia, the Czech Republic and Croatia).

Larin also presented a proposal for the necessary amendments to the current Audit Manual to achieve full compliance with the requirements of IPA III. As recommendations in changes to the legislative framework, she presented a proposal to adopt a new government decision on the appointment of the Audit Authority responsible for the IPA III programme.