Conference on

Public Internal Control in the EU

DG Budget, in conjunction with the
Ministry of Finance of the
Netherlands
Rijksacademie voor
Financin, Zeestraat 86,
Den Haag,
15 / 16 May 2014
CD 04 - Stakeholder
expectations

Stakeholder expectations
Ing. Luk Wagenknecht
First Deputy Minister of Finance, Czech Republic

Good afternoon. Ladies and gentlemen, my name is Lukas Wagenknecht and I am the 1
st

Deputy Minister for the Financial Management and Audit section at the Ministry of Finance
in the Czech Republic. I would like to thank you for the opportunity to give this speech here
today.
We all have accomplished a very important task. The Compendium is the outcome of our
joint effort over last two years. The overview of the Public Internal Control systems in each of
the 27 members of the European Union is a particular and unique act. It provides crucial
information and motivates us to discuss relevant issues. For the Czech Republic it has been a
source of significant inspiration.
As we all know, there is a vast difference between private and public sector. And this
difference lies in profit orientation. While public sector strives for increasing earnings in the
first place, the primary goal of public sector is to provide services for citizens. Therefore we
have to develop adequate internal control systems in order to ensure economy, efficiency and
effectiveness. Three months ago a new government elected in the Czech Republic defined the
Public Internal Control system as one of its priorities.
To be more specific, I will now present what we have been doing in order to improve our own
internal control system.
Actually, in compliance with the INTOSAI Lima Declaration, a new law extending the scopes
of The Supreme Audit Institution (SAI) competences is being prepared. New competences of
SAI will include the audit of municipal authorities, state owned companies and their budget
management.
The Ministry of Finance has been charged to draft a new law that will replace the Financial
Control Act currently in force. The new Financial Control Act should cover the following
main objectives:
To harmonize the terminology with the new EU legislation: in particular Regulation
(EU, EURATOM) No. 966/2012 of the European Parliament and of the European
Council of 25 October 2012 on the financial rules applicable to the general budget of
the European Union and the abolition of the Regulation (EC, EUROATOM) No
1605/2002;
To create legal conditions for the establishment and maintenance of a decentralized
internal audit in competence of each budget owner and centralized internal audit
system at the central government level focused on state treasury;
To establish function of audit committees in public sector.
etc.
Also the functioning of the Ministry of Finance was partly changed. We decided to improve
coordination function of Ministry of Finance. New Central Harmonization Unit has been
established as a separate department to strengthen the position of the CHU as the supervisor
of PIC development (quality assurance).
No doubt many challenges lie ahead. Some examples are:
Project of State Treasury
Open data
Etc.
In the process of serious work there were also some highlights of more of an amusing nature.
We can give some examples why it is necessary to have effective internal control.
What is my expectation from our conference? I am ready to discuss about progress and
improvement of the real implementation of PIC model in practice. I feel this concept as the
opportunity to help public administration to be more effective, to improve audit and control
function and mainly to provide assurance to our citizens about effort to save money in public
budgets. The possibility to share and discuss our good and bad experiences and practices can
help us more than anything else.
To conclude, I would like to thank you for your attention and express the gratitude of the
Czech Ministry of Finance for the opportunity to be here today. I would also like to thank the
European Commission for actively supporting and coordinating this Network.
I hope that our joint efforts will continue and bring further excellent results, in particular with
regard to our common goal, which is improved governance in the Public Sector.