At the sitting held on 7 December, the members of the Finance Committee considered theState Audit Institution’s financial audit reporton the financial statement of the Republic of Serbia 2008 Budget.

The sitting was chaired by the Committee Chairman Zoran Krasic and attended by the SAI Council President Radoslav Sretenovic and associates and representatives of the Ministry of Finance.

Presenting the SAI financial audit report on the financial statement of the Republic of Serbia 2008 Budget, the SAI Council President Radoslav Sretenovic said that from 2002 to date there had been no audits of the budgetary annual financial statement, that this Report was the first, and that it should contribute to better management of financial funds and reform in the public finance sector. He thanked the Finance Committee for its active support of the SAI. The Audit of the 2008 budgetary end-of-year statement was done between May and September by four auditors. The audit of the 2008 budget’s financial statement was the SAI’s priority in 2009, which was limited by the SAI’s limited resources. The audit was done in 14 ministries, 1 direction and 1 department. The audit report covered the following areas: balance sheet, balance of income and expenditure, capital expenditure and income report, cash flow report, report on the execution of the republican, report on donations received, report on domestic loans and debt pay-offs, report on debt pay-offs and foreign loans, report on the usage of funds of current and permanent budgetary reserves and report on guarantees issued. Although limited, the audit showed certain irregularities in the main treasury account, in the matter of establishing internal control and audit of direct and indirect budgetary beneficiaries, in recording financial and non-financial assets, public debt, short-term obligations, assets and liabilities off-balance sheet, execution of the budget, guarantees, donations and income statement.

In the discussion on the SAI Report, the Committee members emphasised its importance and restated their support of the SAI and its work. The Committee members objected to the manner in which the SAI presented the report, pointing out that the process of its submission should start at the National Assembly. It was also mentioned that the SAI offered no opinion to the budget’s financial statement and added that the audit should be extended to include public companies, mandatory social insurance organisation and local self-government units. Also, the Committee members suggested that the SAI should invite all the participants of the audit to clarifying debates, adding that the SAI is obliged to act according to the law if the irregularities observed are liable to criminal responsibility.

In the continuation, on 8 December, the Committee unanimously decided to propose that the National Assembly accept the Committee’s following recommendations:

1. That the Financial Audit Report on the financial statement of the Republic of Serbia 2008 Budget, submitted by the State Audit Institution, be discussed at a National Assembly sitting,

2. Based on the conclusion of the Financial Audit Report on the financial statement of the Republic of Serbia 2008 Budget, submitted by the State Audit Institution, the laws regulating audits and public finance be amended and modified.