The role of internal audit is increasingly important - Serbia is introducing significant changes in this area

The importance of internal audit in the public sector is growing, and systemic changes related to this profession are underway in Serbia, as highlighted at workshops held in the Ministry of Finance, within the project "EU support for public finance management in Serbia."

These workshops aim to develop a new set of manuals, tools, and guidelines for internal auditors in Serbia, serving as key instruments for applying international standards in practice.

During the workshops, it was highlighted that the role of internal audit in the public sector is becoming more vital, not only as a control mechanism but also as a professional function that assists management in making more informed decisions, enhances services, and bolsters trust in institutions.

The workshop participants were addressed by the Assistant Minister of Finance in the Central Harmonisation Unit (CHU), Spomenka Vircburger, and international expert Fransis Nicholson, who is undertaking his second mission in Serbia in cooperation with the CHU.

Vircburger highlighted that systemic changes concerning internal audit are currently in progress in our country, including updates to regulations and manuals to align with the latest international standards.

She noted that the CHU is already working on enhancing the regulatory and operational framework for internal financial control in the public sector, as well as improving the quality of internal audit in Serbia.

As she stated, work is underway on preparing extensive materials, starting from the regulation that includes the Law on the Budget System and related regulations in the field of internal audit, through the Manual for Internal Audit and guidelines for specific areas of internal audit, training materials for internal auditors, all the way to exam questions for obtaining the title of certified internal auditor of the public sector and the methodology for external quality assessment.

Vircburger pointed out that the existing methodology prepared by the CHU was ahead of its time in many respects, so some solutions that exist in the work of internal auditors are now explicitly required by the standards. However, there are many new aspects we debated to operationalise them for our public sector, so they genuinely contribute to the goal that the new standards aim for.

According to Nicholson, the quality of internal audit depends not only on compliance with rules but also on how much auditors contribute to actual improvements in the work of institutions.

The CHU plays a vital role in implementing effective control and internal audit. When control is discussed, it is often mistakenly seen as interference or supervision of others' work, but its true purpose is to facilitate informed decision-making and efficient resource management. That is why the CHU is a significant part of this initiative, which is backed by the EU," Nicholson said.

Internal audit, he emphasised, is not a bureaucratic system separate from the reality of institutions, but an independent adviser who understands the system from within while maintaining objectivity and integrity. In that sense, according to him, the quality of internal audit is not only reflected in formal compliance with standards, but also in how much its work is focused on the real needs of management and the achievement of the institutions' goals.

Standards provide the foundation, but the real value lies in performance. If the recommendations of the internal audit are implemented, we will witness tangible improvements in how services are delivered, a decrease in irrational expenditure of public funds, and better management of assets. All these factors contribute to increased citizen confidence in the public sector.

He told internal auditors that he has faith in their profession and that their moment has arrived.

Their role is crucial in Serbia's process of accession to the European Union. This presents an opportunity for them to become involved, gain visibility, and increase the impact of their work on service quality. Auditors can directly help identify irrational expenditure of funds. They should be proud of their profession and take seriously the ethical obligations that underpin it," Nicholson concluded.

The activities mentioned are part of the project "EU support for public finance management in Serbia," which is funded by the EU and carried out by the United Nations Development Programme (UNDP), in partnership with the Centre of Excellence in Finance (CEF) and the Ministry of Finance of Slovakia.