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Act No 502/2001 Coll on financial control and internal audit and on the amendments to certain acts

updated: 29. 03. 2011

 


                                                                                    THE SPEAKER

                                                OF THE NATIONAL COUNCIL OF THE SLOVAK REPUBLIC

 

promulgates

 

this full wording of Act No. 502/2001 Coll. on financial control and internal audit and on the amendment to certain acts as amended and enforced by Act No. 618/2004 Coll., Act No. 165/2008 Coll., Act No. 264/2008 Coll. and Act No. 57/2010 Coll.

 

                                                                                          ACT

                                                                  on financial control and internal audit


The National Council of the Slovak Republic has resolved to enact the following Act:
 

PART ONE
INTRODUCTORY PROVISIONS

 

Section 1

 

(1) This act lays down basic rules, objectives of and ways in which financial control, internal audit and government audit are carried out as part of the system of public internal financial control ensuring compliance with specific legislation1) and international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad as well as compliance with cost effectiveness, efficacy, efficiency and expediency in the management of public funds and in other activities of public authorities.

(2) This act lays down in more detail the scope of power of the Ministry of Finance of the Slovak Republic3) (hereinafter the “ministry of finance”) and of other public authorities in the field of financial control, internal audit and government audit. This act lays down the rights and duties of the controlled entity, audited entity, audited person and the cooperation of legal persons and natural persons which are suppliers of performance, goods, works or services to the controlled entity, audited entity or audited person (hereinafter the “third party”).  

(3) Provisions of this act shall not apply to controls carried out under specific legislation4) and to audits carried out under specific legislation.4a)

 

Section 2
 
(1) Financial control shall mean a set of activities verifying
a) compliance with requirements for granting public funds,5)
b) compliance with specific legislation1) and international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad in the management of public funds,
c) compliance with cost effectiveness, efficacy, efficiency and expediency in the management of public funds,
d) the availability, correctness and completeness of information on performed financial transactions and on the management of public funds for the purposes of financial management,
e) compliance with measures adopted to correct the deficiencies detected  by the financial control and to eliminate their underlying causes.
according to this act and specific legislation1) 
 
(2) For the purposes of this act
a) internal audit shall mean independent unbiased evaluation and consultations that
1. assess compliance with generally binding legal provisions6) in financial management and other activities performed by the audited entity,
2. assess potential risks of financial management and of other activities of the audited entity and recommend measures for eliminating these risks,
3. give managers7) responsible for financial management reliable and early information on the activities of the audited entity,
4. assess the level of financial management performance with a view to its improvement,
5. facilitate cost effective, efficacious and efficient performance of audited entity activities,
b) public funds shall mean funds pursuant to specific legislation7a) and other funds from abroad provided on the basis of international treaties binding on the Slovak Republic,
c) public authority shall mean an entity of the public administration sector according to specific legislation7b) and a legal person acting as intermediary for the provision of funds of the European Union,7c)
d) financial management shall mean a set of procedures applied by the public authority in accountable and transparent planning, budgeting, use, accounting, reporting and financial control of public funds with the aim of their cost-effective, efficacious and efficient use,
e) control body shall mean the public authority performing ex post financial control,
f) controlled entity shall mean the public authority, its internal organisational units, organisations receiving advance payments,12) other legal person and natural person referred to in Section 6, paragraph 4,
g) audit body shall mean the ministry of finance, financial control administration, other ministries and other legal persons referred to in Section 35a paragraph 6, if they perform government audit,
h) audited entity shall mean a central authority, its internal organisational unit and other legal persons referred to in Section 27, paragraph 1,
i) audited person shall mean a public authority, its internal organisational unit, other legal persons and natural persons when received funds, or another legal person and natural person under conditions laid down in this act or specific legislation,12a)
j) financial transaction shall mean receiving or spending public funds in cash or cashless, legal transaction or another property transaction,
k) cost-effectiveness shall mean minimising costs of activity performance and/or of procurement of goods, works and services while maintaining their appropriate standard and quality,
l) efficacy shall mean maximising activity results with respect to available public funds,
m) efficiency shall mean the relation between the planned activity result and the actual result of the activity with respect to spent public funds,
n) expediency shall mean the relation between the defined purpose of use of public funds and the actual purpose of their use,
o) risk shall mean the probability of occurrence of events having an adverse effect on the achievement of defined goals,
p) central authority shall mean a public authority administering a chapter of the state budget,8)
r) public internal financial control system shall mean a system comprising financial management, internal audit, government audit and activities of the ministry of finance while accomplishing the tasks of the Central Harmonising Unit for Financial Control, Internal Audit and Government Audit,
s) head of public authority shall mean the statutory body,
t) government audit shall mean independent, unbiased, verification, evaluation and assurance performed according to this act, specific legal provisions12b) while taking into account accepted international auditing standards.


Section 3

 

The ministry of finance shall be the central state administration authority for financial control, internal audit and government audit, and within this scope of power, the ministry shall
a) coordinate planning and performing the ex post financial control and government audit with other control bodies and audit bodies; within this coordination, it shall have the right to request another audit body to perform government audit,
b) give a prior written consent to another ministry and financial control administration with the performance of a government audit under Section 35a, paragraphs 3 to 5; this shall not apply if the government audit is to be performed on a request from the ministry of finance, or on the basis of a mandate from the ministry of finance,
c) perform these activities of the Central Harmonising Unit for Financial Control, Internal Audit and Government Audit:
1. give guidance to performing financial control, internal audit, government audit, establishment and activities of committees for control and audit including drafting specimen statutes of the committee for control and audit; the relevant public authorities shall have the obligation to follow this guidance,
2. monitor and evaluate the performance quality of financial control, internal audit and government audit while provision of Section 35c, paragraph 3, of the first clause shall apply by analogy and provisions of Section 35d, 35e and 35f shall apply as appropriate to the performance of this activity, propose systemic measures to improve their quality; public authorities shall have the obligation to cooperate with and to give the ministry of finance the report on the findings of the ex post financial control (herein the “report”), the report on the findings of the audit operation (herein the “audit report”) or the government audit report,
3. arrange specialised training of employees performing financial control, internal audit and government audit,
4. cooperate with other state authorities, the bodies of the European Union, authorities of other countries and international organisations in the area of financial control, internal audit and government audit,
5. present a summary report on the findings of the ex post financial control, internal audit and government audit based on annual reports referred to in Section 6, paragraph 6, Section 31a, paragraph 1(b) and Section 35e, paragraph 7 together with the proposal of the final state account to the government of the Slovak Republic,
d) shall draw up draft laws and other generally binding legal provisions in the field of financial control, internal audit and government audit,
e) shall perform activities of an audit body set forth in specific legislation,12c)
f) shall perform activities of a certifying body set forth in specific legislation,12d)
g) shall control compliance with this act and generally binding legal provisions issued to ensure its enforcement while performing financial control, internal audit and government audit,
h) shall impose fines referred to in Section 36, paragraph 1, and Section 37, paragraphs 1 and 2.


Section 3a

 

(1) The ministry of finance and another central authority may establish a committee for control and audit acting as an expert authority. The committee for control and audit shall perform mainly these tasks:
a) assess the standard of performance of financial control, internal audit and government audit, and risk management with a view to their development, in an independent manner,
b) monitor the efficacy and efficiency of financial control, internal audit and government audit with a view to the quality of their performance,
c) provide advice and consultations to heads of central authorities and to managers.

(2) In case of statutes of the committee for control and audit of the ministry of finance, other tasks of the committee for control and audit, its composition and rules of procedure shall be laid down in the statutes of the committee for control and audit approved by the minister of finance of the Slovak Republic (hereinafter “minister of finance”), or, in case of the statutes of the committee for control and audit of another central authority, by the head of another central authority.


PART TWO
FINANCIAL CONTROL

General provisions


Section 4

 

The objective of financial control is to ensure
a) cost-effective, efficacious and efficient performance of public administration,
b) compliance with generally binding legal provisions6) in the management of public funds by the controlled entity,
c) compliance with cost effectiveness, efficacy and efficiency in the management of public funds,
d) early and reliable informing of the head of public authority on the standard of the management of public funds and on the performance of financial transactions.


Section 5

 

Financial control shall be performed as ex ante financial control, interim financial control and ex post financial control.


Section 6

  

(1) In an ex ante financial control, the public authority shall verify each planned financial transaction.

 (2) Interim financial control shall verify a financial transaction selected by the (head) manager of engaged organisational unit within public authority.

(3) Employees of control bodies, internal auditors and government auditors except managers shall not be allowed to perform ex ante financial control and interim financial control while performing tasks within their function.

(4) In an ex post financial control, the control body shall verify, with a derogation provided for in paragraph 5, a selected financial transaction within
a) its budget or state budget chapter it administers including public funds provided from this budget to legal persons and natural persons,
b) the state dedicated fund it administers including public funds provided from this fund to legal persons and natural persons,
c) legal persons founded or established by it,
d) legal persons in which it exercises shareholders’ rights,
e) state companies founded by it,
f) legal persons acting as intermediary for the provision of public funds from its budget.

(5) The control body, which is the ministry of finance, shall carry out ex post financial control of a selected financial transaction that is a legal transaction or another property transaction and of a selected financial transaction concerning management of funds from the state budget, within the chapter of the state budget it administers except for
a) funds of the state budget and funds of the European Union earmarked for funding joint Slovak Republic and European Union programmes,
b) funds from abroad not referred to under (a) herein provided on the basis of international treaties binding on the Slovak Republic,
c) funds from the state budget insofar as their provision is a precondition for the provision of funds according to (b) herein.

(6) Central authorities shall have the obligation to draw up an annual report on the findings of the ex post financial controls, in which they give mainly information about the number of ex post financial controls they performed, findings from the controls and measures to correct the deficiencies established by the ex post control and to eliminate their underlying causes, and to send the ministry of finance the report for the previous calendar year by the end of next February.

(7) General binding legislation to be issued by the ministry of finance shall lay down the details of the content of the annual report on the findings of ex post financial controls.


Section 7

 

(1) Control bodies, internal auditors and audit bodies shall have the obligation to cooperate with the representatives of the bodies of the European Union and to inform them on the subject and purpose of the audit of joint Slovak Republic and European Union programmes carried out in accordance with specific legislation.12e)

(2) The ministry of finance shall provide information concerning the application of this act to the bodies of the European Union within the time limits and scope specified by the bodies of the European Union pursuant to specific legislation.12c) To this end, the ministry of finance shall have the right to require necessary information both from public authorities and from other persons that were provided public funds to finance joint Slovak Republic and European Union programmes, and these authorities and other persons shall have the duty to provide the requested information.

 

Section 8

 

The head of public authority shall be responsible for ensuring
a) creation, continuation and development of financial management,
b) elimination of interventions aimed at influencing the employees performing financial control,
c) mutual incompatibility and separation of decision-making powers of managers from powers of employees responsible for the performance of the financial transaction and from powers of employees responsible for accounting,
d) appropriate qualification and professional competence of employees specified under (b) and (c) for the performance of their activities,
e) ex post financial control verification of selected financial transactions as needed by public authority,
f) adoption of measures correcting the identified deficiencies and eliminating their underlying causes,
g) identification of employees responsible for identified deficiencies and measures taken with respect to them according to specific legislation,13)
h) risk management to prevent violations of specific legislation1) and international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad while implementing the plans and goals of the public authority,
i) monitoring activities performed by the public authority with a view to obtaining information on them, to assessing the standard of their performance, to reporting deficiencies identified in activities performed by the public authority and their elimination.


Section 9

Ex-ante financial control

(1) In an ex ante financial control, compliance of the planned financial transaction with the approved budget of the public authority, specific legislation,1) international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad, concluded contracts,13aa) decisions issued on the basis of specific legislation 13ab) or with internal regulatory acts on the management of public funds shall be verified with a view to cost-effectiveness, efficacy, efficiency and expediency of the use of public funds.

(2) Ex ante financial control shall be performed by the manager7) commissioned by the head of public authority and employees responsible for budget, public procurement, property administration and other specialised activities depending on the nature of the financial transaction.

(3) Ex ante financial control shall be confirmed by the persons referred to in paragraph 2 with signature and date of the control on a document belonging to the planned financial transaction file.

(4) Financial transactions may not be performed or continued without their verification in an ex ante financial control.

(5) During an ex ante financial control, persons referred to in Section 2 shall have the obligation to inform in writing the head of public authority of identified serious deficiencies which hinder the performance of the controlled financial transaction or prevent continuing its preparation.

(6) Provisions of paragraph 4 shall not be applied to the tasks of the integrated rescue system and to some tasks of the Police Force, Fire and Rescue Corps, customs administration, armed forces of the Slovak Republic, Corps of Prison and Court Guard, Railway Police and intelligence services when they are urgent.13a) Provisions of paragraph 4 shall also not be applied in cases of immediate cleanup after operational breakdowns and other emergencies when such cleanup is urgent with a view to preventing more damage to property.


Section 10
I

nterim financial control

(1) In an interim financial control, compliance of the selected financial transaction with specific legislation,1) concluded contracts, 13aa) international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad, and decisions issued on the basis of specific legislation13ab) shall be verified with the aim of preventing unauthorised, cost-ineffective, inefficacious, inefficient and inexpedient use of public funds. The head of the organisational unit which activity is related to the financial transaction and which is functionally and organisationally independent from the organisational unit responsible for the preparation and performance of the transaction and for the performance of ex-ante financial control shall select the financial transaction upon a written instruction by the head of public authority.

(2) Interim financial control shall be performed by an employee of the organisational unit referred to in paragraph 1, who is appointed by the manager of this unit. The organisational unit responsible for preparing and performing the selected planned financial transaction and for the performance of ex ante control shall provide necessary cooperation in the performance of interim financial control.

(3) When the employee referred to in paragraph 2 assess that the selected planned financial transaction is in compliance with specific legislation,1) concluded contracts,13aa) international treaties under Section 1 or decisions issued on the basis of specific legislation,13ab) he/she shall make an interim financial control information stating the findings, date, name, surname, function and signature and he/she shall deliver it to the head of the organisational unit responsible for the preparation and performance of the selected planned financial transaction and of the ex ante control.

(4) If the interim financial control identified deficiencies that presented a risk of unauthorised, cost-ineffective, inefficacious, inefficient or inexpedient use of public funds, the employee referred to in paragraph 2 shall draw up an interim financial control report that, in addition to the particulars of the interim financial control information set forth in paragraph 3, shall also include the identified deficiencies and warning that the performance of the planned financial transaction may only continue after their elimination. The employee referred to in paragraph 2 shall present the interim financial control report to the head of the organisational unit referred to in paragraph 1 and the head of the organisational unit responsible for the preparation and performance of the selected planned financial transaction.

(5) The financial transaction may only be performed after the elimination of deficiencies identified in the interim financial control.


Ex post financial control

 

Section 11

 

Ex post financial control shall verify
a) the objective status of controlled facts and their compliance with specific legislation,1) international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad, decisions issued on the basis of specific legislation13ab) or internal regulatory acts on the management of public funds with a view to cost-effectiveness, efficacy and efficiency in the management of public funds,
b) compliance with the requirements for the provision of public funds and requirements for their use,
c) performance of ex ante financial control,
d) compliance with the procedure under Section 10 in the performance of interim financial control,
e) compliance with measures adopted to correct the deficiencies identified by the financial control and to eliminate their underlying causes.


Section 12

 

(1) In ex post financial control, the control bodies and controlled entities shall follow the basic rules of ex post financial control (Sections 13 to 25).

(2) Employees of control body and invited persons (Section 24) shall be authorised to perform the ex post financial control only based on a written authorisation to perform the ex post financial control issued by the head of the control body.


Basic rules of ex post financial control

 

Section 13

 

(1) In ex post financial control, the employees of the control body shall have the right
a) to enter buildings, facilities, plants, means of transport and the real estates of controlled entities when used for achieving tasks in public interest, and to enter dwellings when also used for business or other economic activity and when its is necessary for accomplishing the tasks under this act,
b) to require the controlled entity to present originals of documents, records on data storage media, their extracts, statements and other information necessary for performing the ex post financial control within the set time limit,
c) to also collect originals of documents, records on data storage media, their extracts and other information which disclosure is not prohibited in generally binding legal provisions and which are necessary to secure evidence, including other materials essential for other transactions in the context of the ex post financial control, outside the premises of the controlled entity,
d) to require the controlled entity to cooperate in the scope necessary for performing the ex post financial control if the purpose of the ex post financial control cannot be achieved in another way,
e) to require a third party to present documents, furnish information and explanation related to the ex post financial control in the controlled entity and shall have the right to take documents and other materials if it is necessary for achieving the purpose and goal of the ex post financial control,
f) to require the controlled entity to re-design measures for correcting the deficiencies identified in the ex post financial control and for eliminating their underlying causes if the employees of the control body have reason to believe that due to the serious nature of the deficiencies identified in the ex post financial control these measures would be ineffective and to present a written list of these measures within the time limit set by the control body,
 in the necessary scope under conditions laid down in specific legislation.13b)

(2) In ex post financial control, the employees of the control body shall have the obligation
a) to notify the controlled entity of the subject, purpose and commencement date of the ex post financial control in advance; if the notification of ex post financial control commencement could result in thwarting the purpose of the ex post financial control, they shall have the obligation to make such notification not later than by the commencement of the ex post financial control,
b) to prove that they are authorised to perform the ex post financial control and to present their identity card or service card,
c) to issue the controlled entity and the third party an acknowledgement of taking original papers, documents and other materials outside the premises of the controlled entity and the third party and to ensure their due protection against loss, destruction, damage and misuse; the control body shall return these items to those from whom they were taken when they shall not be needed for continuing the financial control or other procedure under specific legislation,14)
d) to brief the controlled entity on the report before its consideration and to ask the controlled entity to present written observations to the findings of the control presented in the report within the time limit set by the control body,
e) to examine whether the objections to control findings presented in the report are substantiated and to take well-founded objections into account in the supplement to the report and to inform the controlled entity of it,
f) to inform the controlled entity of unfounded objections in writing not later then by the date of report consideration,
g) to consider the report with the controlled entity,
h) in the minutes from report consideration (hereinafter the “minutes”), to task the controlled entity with taking measures correcting the deficiencies identified in the ex post financial control and eliminating their underlying causes and with presenting a written list of these measures, to present a written report of their accomplishment within the set time limit, to identify employees responsible for deficiencies identified in the ex post financial control and to take measures with respect to them according to specific legislation13) within the given time limit,
i) to give the controlled entity the report and the minutes,
j) to inform the superior body of the controlled entity about control findings in the report,
k) to report suspicion of criminal offence to law enforcement agencies and other facts to competent bodies under specific legislation.14)

(3) Powers set forth in paragraph 1 and duties set forth in paragraph 2 (a) to (c) and (e) shall apply to invited persons by analogy.


Section 13a

 

Repealed


Section 14

 

(1) The controlled entity shall have the right
a) to require the employees of the control body and the invited persons to prove facts referred to Section 13, paragraph 2 (b),
b) to require the control entity and invited person to give an acknowledgement of receipt of originals of documents, records on data storage media, their extracts, and other information necessary for performing the ex post financial control,
c) to make observations on control findings in the report in writing within the time limit set by the control body,
d) to require the control body to deliver the report.

(2) The controlled entity and its employees shall have the obligation
a) to create conditions for performing the ex post financial control and to refrain from conduct that could jeopardise its commencement and proper conduct,
b) to brief the control body and invited person on safety measures in the premises of the controlled entity at the commencement of the ex post financial control,
c) to present, on request, the control body the results of controls performed by other bodies4) which are relevant for the subject of the ex post financial control,
d) to allow the control body entry to buildings, facilities, plants, means of transport and the real estates used by the controlled entity for achieving tasks of public interest, and entry to dwellings under the conditions referred to in Section 13, paragraph 1 (a),
e) to submit requested documents and statements, to issue written acknowledgement of their completeness, to provide information on the subject of the ex post financial control within the time limit set by the control body and to cooperate in the performance of the ex post control,
f) to be present at the consideration of the report, on the request of the control body,
g) to adopt measures correcting the deficiencies identified by the ex post financial control and eliminating their underlying causes within the set time limit.
h) to present the control body a written report on the accomplishment of measures adopted to correct the deficiencies identified by the ex post financial control and to eliminate their underlying causes, on the identification of employees responsible for the deficiencies identified in the ex post control and on measures taken with respect to them under specific legislation,13)
i) to re-draft the written list of measures adopted to correct the deficiencies identified by the ex post financial control and to eliminate their underlying causes and to submit it to the control body if requested so by the control body according to Section 13, paragraph 1 (f)m) ,

under conditions laid down in specific legislation.13b)

(3) The controlled entity shall have no obligation to provide papers and documents under Section 13, paragraph 1 (b), and cooperation under Section 13, paragraph 1 (d), if their provision would violate the secrecy obligation stipulated by law and a competent authority did not lift this secrecy obligation of the controlled entity.


Section 14a

 

The third party shall have the obligation to cooperate with the control body within the scope referred to in Section 13, paragraph 1 (e).


Section 15

 

(1) The employees of the control body and invited persons who know facts giving rise to questioning their impartiality in view of their relationship to the subject of the ex post financial control and/or to the controlled entities shall have the duty to report these facts to the control body in writing.

(2) The head of the controlled entity may file written objections stating the grounds against the participation of employees of the control body and of invited persons in the ex post financial control with the control body if he/she questions the impartiality of employees of the control body and of the invited persons. Filing of objections shall have no suspensive effect.

(3) Employees of the control body and invited persons against which the controlled entity filed objections under paragraph 2 shall be authorised to only perform urgent activities in the ex post financial control.
 
(4) The head of the control body shall have the obligation to decide on objections set forth in paragraph 2 not later than within three working days from their application and to inform the applicant of the decision in writing. General provisions on administrative procedure shall not apply to proceedings concerning impartiality.15)

 

Section 16

 

(1) Control bodies shall draw up a report on control findings of the ex post financial control, a partial report on the result of the ex post financial control (hereinafter a “partial report”), an interim report on the result of the ex post financial control (hereinafter an “interim report”), supplement to the report and information of the result of the ex post financial control (hereinafter as “information”).

(2) The partial report, interim report and supplements to the report are a part of the report; provisions of Sections 13 and 14 shall apply as appropriate.
 

Section 17

 

The report shall include
a) the name of the control body,
b) names and surnames of employees of the control body and of invited persons which performed the ex post financial control,
c) the name of the controlled entity,
d) the subject of the ex post financial control,
e) the reported period,
f) the place and time of the ex post financial control,
g) the full description of control findings, specification of generally binding legal provisions6) that were breached, of papers and documents proving the correctness of control findings,
h) the list of annexes composed mainly of papers and documents related to the subject of the ex post financial control,
i) the date of report drafting,
j) signatures of employees of the control body and of invited persons,
k) the date of briefing the controlled subject on the report and the specification of the time limit for filing objections against control findings,
l) written acknowledgement by the controlled entity of receiving the report.


Section 18

 

(1) A partial report shall be drafted when
a) it is necessary to adopt measures correcting the deficiencies established in the ex post financial control without undue delay,
b) several control bodies perform the ex post financial control,
c) the ex post financial control is performed in several controlled entities or in several internal organisational units12) of the controlled entity,
d) the control findings give reasons to believe that a criminal offence, infraction or another administrative offence was committed.

(2) Section 17 shall apply to the particulars of the partial report as appropriate.

Section 19

(1) An interim report shall be drafted when the ex post financial control was performed on the spot at the presence of an authorised representative of the controlled entity due to the fact that the objective status could not be verified on the basis of papers and documents submitted by the controlled entity.

(2) Section 17 shall apply to the particulars of the interim report as appropriate.


Section 20

 

(1) Supplement to the report shall be drawn up when the controlled entity filed justified objections against control findings identified in the report in writing within the time limit set by the control body or when new facts, unknown at the time of studying the report, emerged.

(2) Section 17 shall apply to the supplement to the report as appropriate.


Section 21

 

(1) Information shall be drawn up when the control body identified no deficiencies.

(2) Section 17 shall apply to the particulars of the information as appropriate.


Section 22

 

(1) Ex ante financial control shall be concluded by considering the report when the ex post financial control identified deficiencies or by briefing the controlled entity on the information when the ex post financial control established/detected no deficiencies.

(2) After considering the report, the ex post financial control shall also be considered concluded when the controlled subject refused briefing on the report, failed to give written observations or refused to sign the minutes. These facts shall be mentioned in the minutes.
 
(3) The control body shall have the obligation to draft minutes from the consideration of the report that mainly include
a) the date of briefing the controlled entity on the report,
b) the date of considering the report, names of employees of the control entity and of the representatives of the controlled entity present at the consideration of the report and their signatures,
c) imposing the obligation to adopt measures correcting deficiencies identified by the ex post financial control and eliminating their underlying causes and to present a written list of these measures within the set time limit.
d) imposing the obligation to present the control body a written report on the accomplishment of measures adopted to correct the deficiencies identified by the ex post financial control and on the elimination of their underlying causes, on identification of employees responsible for these deficiencies and on measures taken with respect to them under specific legislation13) , within the set time limit.
e) the acknowledgement by the controlled entity of receiving papers and documents provided for the ex post financial control.


Section 23

 

In ex post financial control, control bodies shall mutually cooperate within their scope, including joint ex post financial controls, and they shall give each other information related to the performance of the ex post financial control.


Section 24

 The control body may invite consenting employees of other public authorities and other legal persons and natural persons to perform the ex post financial control when this is substantiated by the specific nature of the ex post financial control. The participation of invited persons in the ex post financial control shall be understood to be other action in general interest.


Section 25

 

(1) The costs incurred to the invited person in connection with performing the ex post financial control shall be paid by the control body.

(2) Considered as costs referred to in paragraph 1 shall be the wage or salary compensation at the level of average earnings16) and compensation under specific legislation.17)

(3) Costs of controlled entity incurred in connection with the performance of ex post financial control shall be paid by the controlled entity.


PART THREE
INTERNAL AUDIT
General provisions

 

Section 26


(1) The heads of central authorities, except where this would be manifestly uneconomical, ineffective or inefficient given the size of the central authority’s staff, public fund budget or organisational structure, shall have the obligation to ensure the performance of internal audits by their own employees (hereinafter “internal auditors”) or by independent internal organisational units made up of internal auditors (hereinafter “internal audit units”), separated from management structures both in terms of their function and organisation. Derogations from the obligation to ensure the performance of internal audits in central authorities by their own employees shall be granted by the minister of finance.

(2) Internal audits shall have the objective of carrying out independent and objective evaluations and consultations aimed at improving management and control processes, thus facilitating the accomplishment of the tasks, objectives and goals of the audited entity, and promoting a systematic and methodological approach with a view to a more effective management of the risks arising from the activities of the audited entity.

 

Section 27


(1) Internal audits shall be performed, with derogation pursuant to paragraph 2,
(a) in central authorities and their internal organisational units, budgetary organisations and semi-budgetary organisations established by and reporting to the relevant central authority,
(b) in dedicated State-run funds administered by central authorities, 
(c) in legal persons reporting to the central authority and acting as intermediaries for the provision of public funds.

(2) The internal audit unit of the ministry of finance shall perform internal audits in relation to the ministry’s state budget chapter.

(3) On a request from the head of a central authority, an internal audit shall be performed by the internal audit unit of the ministry of finance where this is substantiated by circumstances set forth in Section 28, paragraph 6.

(4) During the performance of an internal audit under paragraph 3, the head of the central authority that has requested the internal audit shall have the right to make suggestions to the internal auditor concerning the performance of the internal audit.


The status of internal auditors

 

Section 28

 

(1) The internal auditor of the ministry of finance shall be appointed or recalled by the minister of finance.

(2) Internal auditors of other central authorities shall be appointed or recalled by the heads of relevant central authorities in consultation with the minister of finance. Consultations with the minister of finance shall not be required in case of termination of a civil service relationship, a public service relationship, or an employment relationship as provided for in Section 30, paragraph 3. The heads of central authorities shall notify the ministry of finance of the appointment or recall of internal auditors.

(3) In carrying out their tasks, internal auditors shall be bound only by the Constitution, laws and other generally binding legislative provisions. In the performance of their duties, they shall abide by internationally recognised standards for a professional performance of internal audits and by the internal auditor’s code of ethics.

(4) The heads of audited entities shall have the obligation to ensure that there shall be no interference that could have an adverse impact on the performance of internal audits by internal auditors.

(5) Internal audit units or internal auditors may not be assigned any duties that go beyond the scope of internal audits or that interfere with independent execution of internal audit tasks.

(6) Internal auditors shall not be allowed to perform internal audits if their impartiality is questionable in view of their relationship to the subject of the internal audit or to the audited entity. Should the internal auditor gain knowledge of any facts excluding him/her from performing internal audit, he/she shall notify the head of the central authority of such facts without undue delay.


Section 29

 

The heads of internal audit units or, where no such units have been created, independent internal auditors shall perform internal audits under direct guidance of the head of the relevant central authority, who is also responsible for effective and efficient application of the findings of internal auditors with a view to improving the system of financial management with focus on cost-effective, efficacious and efficient fulfilment of the tasks of the central authority.


Section 30

 

(1) The head of a central authority shall recall an internal auditor
(a) in case of a change in his/her civil service relationship, public service relationship or employment relationship17c) except where the change in his/her civil service relationship, public service relationship or employment relationship takes place within the internal audit unit,
(b) in case of termination of his/her civil service relationship, public service relationship or employment relationship.17d)

(2) The internal auditor’s function shall be terminated simultaneously with the termination of his/her civil service relationship, public service relationship or employment relationship pursuant to specific legislation.17e)

(3) The function of the internal auditor recalled under paragraph 1 above shall cease to exist as from the date stated in the written notification, but not later than on the day following the date of its service.


Section 31

 

(1) Internal audits shall be performed in accordance with medium-term internal audit plans (hereinafter “medium-term plans”), annual plans of individual internal auditors (hereinafter “annual plans”) and programmes of individual internal audits (hereinafter “audit operations”).

(2) Medium-term plans shall define in particular audit priorities, the time needed to perform the audits and their frequency, the needs of the relevant central authority that are identified on the basis of its previous performance and its envisaged intentions, and its objectives for a multi-annual, usually a three-year, period.

(3) The annual plan based on the medium-term plan shall specify in greater detail the scope, substantive focus and subject of internal audits, their objectives, time schedules, staffing requirements and other activities related to the performance of internal audits.

(4) The programmes of audit operations shall include, in particular
(a) the name and the seat of the central authority whose internal auditor is to perform the audit operation,
(b) the name and the seat of the audited entity,
(c) the segment of the audited entity’s activities to be assessed,
(d) main orientations of the audit operation and its objectives,
(e) the period to be evaluated in the audit operation,
(f) the commencement and expected duration of the audit operation,
(g) other data that characterise in greater detail the conditions for performing the audit operation.

(5) Medium-term plans and annual plans shall be drawn up by internal audit units or by independent internal auditors based on an objective assessment of the risks arising from the tasks, objectives and goals of the central authority, having regard to the results of the controls performed within the relevant central authority and to the findings of the internal control system. The heads of internal audit units or, in the absence thereof, independent internal auditors shall discuss the preparation of the plans with the relevant head of the central authority who approves these plans, and are obliged to take due account of the latter’s proposals and recommendations. Any changes in or additions to the approved medium-term plan or annual plan shall have to be approved by the head of the relevant central authority on the basis of an updated risk assessment.

(6) The audit operation programme shall be drawn up by the internal auditor or the head of the audit team designated by the head of the internal audit unit and shall be submitted for approval to the head of the relevant central authority for each audit operation.

(7) The programme of the audit operation performed by the internal auditor of the ministry of finance on a request from the head of another central authority as provided for in Section 27, paragraph 3, shall be submitted for approval to the head of the latter central authority and notified to the minister of finance.

(8) The audited entity shall be notified of the audit operation prior to its commencement. If there is a reason to believe that the notification could hinder the conduct of an audit operation, the audit operation shall be notified as on the day of its commencement.


Section 31a

 

(1) The heads of internal audit units or independent internal auditors shall have the obligation
(a) to submit approved internal audit plans referred to in Section 31, paragraphs 2 and 3, to the ministry of finance and to the Supreme Audit Office of the Slovak Republic not later than by 31 January of the planning period,
(b) to draw up annual reports on the work of internal audit units or, in case of independent auditors, annual reports on their work; the reports shall in particular contain the data on the number of performed audit operations and their focus, an analysis into the occurrence of findings concerning the facts that may have an adverse impact on the activities of the central authority, including shortcomings in its internal control mechanisms, recommendations for eliminating identified deficiencies, and shall be submitted to the head of the relevant public authority and the ministry of finance by the end of February of the calendar year following the audit year;
(c) to ensure the collection and the keeping of relevant work documentation on each audit operation.

(2) Where an internal auditor is recalled under Section 30, the recalled internal auditor shall have the obligation to prepare the annual report on his/her work not later than by the date of termination of his/her internal auditor’s function and to submit the report to the head of the relevant central authority and to the ministry of finance.

(3) The heads of central authorities shall have the right to present the ministry of finance their opinions on the work of internal audit units or, as appropriate, the work of independent internal auditors.

(4) The details of substantive particulars of annual reports on the activities of internal audit units and of substantive particulars of annual reports on the activities of independent internal auditors shall be set out in a generally binding legal act to be issued by the ministry of finance.


Section 32

 

(1) The rights pursuant to Section 12, paragraph 2, and Section 13, paragraph 1, and the duties pursuant to Section 13, paragraph 2(b), (c) and (k), shall apply to internal auditors by analogy.

(2) The rights pursuant to Section 14, paragraph 1, and the duties pursuant to Section 14, paragraph 2(a) to (e), shall apply to audited entities by analogy.


Internal auditing procedure

 

Section 33

 

Depending on the nature of the internal audit and on the type of activity to be assessed, the internal auditor may apply mainly the procedures of
(a) financial audit,
(b) audit of compliance,
(c) audit of performance,
(d) system audit,
(e) audit of information systems.


Section 34

 

(1) Financial audits shall be carried out to evaluate
(a) whether the data in the closing accounts of the audited entity match its actual assets and liabilities, sources of its financing and management of assets,
(b) budget management of the audited entity.
(2) Audits of compliance shall be carried out to evaluate compliance with generally binding legal provisions6) in the financial management and in other activities of the audited entity, and the standard of financial management of the audited entity.
(3) Audits of performance shall be carried out to evaluate the level of cost-effectiveness, efficacy and efficiency in using material, financial and human resources for carrying out the tasks of the audited entity.

(4) System audits shall be carried out to evaluate whether financial management procedures of the audited entity are effective and efficient as regards the disclosure and correction of the deficiencies in its activities. System audits shall also have the objective to evaluate whether financial transactions are carried out in compliance with generally binding legal provisions, internal regulatory acts and the requirements of cost-effectiveness, efficacy and efficiency.

(5) Audits of information systems shall be carried out to evaluate the security of information systems of audited entities. At the same time, information system audits shall evaluate the adequacy and completeness of data contained in the information system of the audited entity, corresponding to the character and scope of its activities. For the purposes of this act, security of information systems shall mean the level of protection of the audited entity’s information system from the misuse of data it contains and from its damage or destruction.


Section 35

 

(1) When carrying out an internal audit according to the audit operation programme, the internal auditor shall collect, analyse and evaluate information on the activities of the audited entity with focus on the purpose and objective of the audit operation.

(2) An employee of another public authority or of a legal person or natural person may be invited to participate in the conduct of an audit operation where the complexity and specialisation of audited activities make this necessary for achieving the purpose and objective of the internal audit.

(3) The decision on the participation of invited persons in the conduct of audit operations, which is considered to be another transaction in general interest, shall be made by the head of the relevant central authority.

(4) The costs incurred to the invited person in connection with the audit operation shall be borne by the central authority in which the audit operation is performed. Considered as costs shall be the wage or salary compensation at the level of average earnings16) and compensation pursuant to specific legislation.17)

(5) Where justified, especially if there is a suspicion of unforeseen risks that could have adverse effects on the activities of the central authority, the internal audit unit or an independent internal auditor may perform, by decision of the head of the central authority or in agreement therewith, an audit operation that had not been envisaged in the annual plan.

(6) When carrying out an audit operation in the audited entity that has provided public funds to another legal or natural person, the internal auditor shall have the right to request cooperation of the latter persons within the scope of powers of internal auditors set forth in Section 32, paragraph 1; these persons shall be obliged to provide such cooperation.

(7) When carrying out an audit operation, the internal auditor shall apply the methods that correspond to the subject and content of the audit operation in accordance with the audit operation programme. The internal auditor carrying out an audit operation may combine different internal audit procedures pursuant to Section 33.

(8) After assessing information obtained in accordance with paragraph 1, the internal auditor shall draw up an audit report containing, in particular, the subject of the audit operation, the deficiencies identified in the audit operation, and recommendations for the correction of the deficiencies identified by the audited entity and recommendations on improvements in its internal control system and in risk prevention or mitigation.

(9) If there is an urgent need to warn of an impending risk that could have an adverse impact on the activities of the audited entity or if there are any findings giving rise to a suspicion of criminal activity, the internal auditor shall prepare a partial report on the findings of the audit operation (hereinafter a “partial audit report”) even before the audit operation has been concluded; the report shall subsequently become an inseparable part of the audit report. The internal auditor may prepare a partial audit report also if the internal audit is performed in several audited entities within a single audit operation. The internal auditor shall submit a partial audit report to the head of the audited entity and to the head of the relevant central authority and, if there is a suspicion of the commission of a criminal offence, the report shall be also sent to law enforcement bodies; if there is a suspicion of the misuse of funds of the European Union, the partial report shall be also sent to the legal person through the intermediary of which EU funds are provided, and to the Central Contact Point of the European Anti-Fraud Office in the Slovak Republic.

(10) Internal auditors shall submit audit reports to the heads of audited entities and to the heads of relevant central authorities who are responsible for ensuring that internal auditor's recommendations are taken into account in the correction of identified deficiencies. The internal auditor shall have the obligation to verify whether the audited entity has taken his/her recommendations into account. Where the audit operation reveals any facts that need to be addressed by competent authorities pursuant to specific legislation,14) the internal auditor shall also submit the audit report to the competent authorities pursuant to specific legislation.14) Where appropriate, the head of the central authority shall submit the audit report also to the ministry of finance on a request from the minister of finance.

(11) The head of the central authority shall be authorised to decide about access to the content of audit reports in accordance with specific legislation.18)

(12) The details concerning substantive particulars of audit reports shall be provided for in a generally binding legal act to be issued by the ministry of finance.


PART FOUR
GOVERNMENT AUDIT

 

Section 35a

 

(1) The ministry of finance shall perform government audits
(a) in central authorities; in the central authorities of the Supreme Audit Office of the Slovak Republic and the Slovak Intelligence Service, government audits shall be performed by the ministry of finance as provided for under specific legislation,12c)
(b) in the Military Intelligence service under the competence of the Ministry of Defence of the Slovak Republic13a) as provided for under specific legislation,12c)
(c) in the internal organisational unit of the ministry of finance performing the tasks of a certifying authority,12c) of an intermediate body under the managing authority18ab) or of a paying unit,
(d) in another public authority other than a budgetary or a semi-budgetary organisation established by and reporting to the ministry of finance; however, this exemption shall not apply to government audits of
1. State budget funds and EU funds designated for funding joint programmes of the Slovak Republic and the European Union,
2. funds received from abroad not referred to in point 1 provided on the basis of international treaties that are binding on the Slovak Republic,
3. State budget funds insofar as their provision is a precondition for the provision of funds according to point 2,
4. funds transferred by the Slovak Republic to the budget of the European Union,18ac)
(e) in municipalities, self-governing regions and legal persons established thereby, namely as regards the funds that constitute revenues for municipal budgets and for the budgets of self-governing regions under specific legislation18ad) and as regards their use,
(f) in State-owned undertakings,18ae)
(g) in legal persons founded or established by the ministry of finance or another public authority, except for budgetary or semi-budgetary organisations established by and reporting to the ministry of finance, the exemption granted under (d) applies by analogy; in legal persons founded or established by the Slovak Intelligence Service, government audits shall be performed by the ministry of finance in accordance with specific legislation,12c)
(h) in legal or natural persons to which or through which public funds are provided, and in legal or natural persons to which funds are provided according to paragraph 3(a) to (c), namely their own funds; for the purposes of this act, own funds of a legal person or a natural person are the funds of these persons designated for financing joint programmes of the Slovak Republic and the European Union and for financing the programmes carried out under international treaties that are binding on the Slovak Republic; in legal and natural persons to which or through which the Slovak Intelligence Service provides public funds, government audits shall be performed by the ministry of finance in accordance with specific legislation,12c)
(i) in legal persons in which the ministry of finance or other public authority exercise shareholder rights, and in other legal persons with a government stake in their assets,
(j) in other legal and natural persons referred to under (e) to (i) where so provided under specific legislation.12a)

(2) Financial control administrations shall perform government audits of audited persons referred to in paragraph 1, except for those referred to in paragraph 1(a), (b) and for the ministry of finance.

(3) Other ministries acting as managing authorities,18ab) competent authorities,18ab) as bodies referred to in paragraph 1(c) or as audit bodies,12c) shall conduct government audits in audited persons referred to in paragraph 1, except for the ministry of finance, subject to a prior written approval by the ministry of finance or upon a request from the ministry of finance, focusing on
(a) State budget funds and European Union funds designated for financing joint programmes of the Slovak Republic and the European Union,
(b) funds received from abroad not referred to in (a), provided on the basis of international treaties that are binding on the Slovak Republic,
(c) State budget funds if their provision is a precondition for the provision of funds according to (b),
(d) own funds of legal and natural persons that are provided funds according to (a) to (c).

 (4) Financial control administrations shall perform government audits of audited persons referred to in paragraph 2 subject to prior written approval by the ministry of finance or upon a request from the ministry of finance, focusing on
(a) State budget funds and European Union funds designated for financing joint programmes of the Slovak Republic and the European Union,
(b) funds received from abroad not referred to in (a) provided on the basis of international treaties that are binding on the Slovak Republic,
(c) State budget funds if their provision is a precondition for the provision of funds according to (b),
(d) own funds of legal and natural persons that are provided funds according to (a) to (c).
 
(5) Financial control administrations shall perform government audits referred to in paragraph 4 in legal persons founded or established by the Slovak Intelligence Service and in legal or natural persons to which or through which the Slovak Intelligence Service provides public funds, under conditions set forth in specific legislation.12c) Other ministries referred to in paragraph 3 shall perform government audits referred to in paragraph 3 above in the Supreme Audit Office of the Slovak Republic, in the Slovak Intelligence Service, and in the Military Intelligence service falling under the competence of the Ministry of Defence of the Slovak Republic13a), and in legal or natural persons to which or through which the Slovak Intelligence Service provides public funds under conditions set forth in specific legislation.12c)

(6) The ministry of finance may assign the performance of a government audit to a legal person that possesses the necessary professional, staffing and material capabilities for performing the government audit.

(7) Legal persons assigned with the performance of government audit pursuant to paragraph 6 shall perform the government audit in audited persons referred to in paragraph 1 with the exception of the Supreme Audit Office of the Slovak Republic, the Slovak Intelligence Service and the Military Intelligence Service.


Section 35b

 

Government audits carried out under this act and under specific legislation shall12b)
(a) verify and assess
1. compliance with specific legislation,1) concluded contracts,13aa) international treaties binding on the Slovak Republic based on which the Slovak Republic receives funds from abroad, decisions issued under specific legislation13ab) and internal regulatory acts in financial management and in other activities18af) of audited persons,
2. cost-effectiveness, efficacy and expediency in the management of public funds and use of human resources with a view to the fulfilment of the tasks of the audited person,
3. compliance with the requirements for the provision of public funds and requirements for their use,
4. efficacy and efficiency of financial management of the audited person,
5. security and functionality of information systems of the audited person, and adequacy and completeness of data in the information system of the audited person considering the nature and scope of its activities,
6. implementation of measures taken to correct the deficiencies identified by government audits and to eliminate their underlying causes, and implementation of recommendations from partial reports on government audits (hereinafter “partial reports”) and from government audit reports, 
7. availability, accuracy and completeness of information on financial operations and financial management of audited persons,
8. other facts as provided for under specific legislation,12a)
(b) identify and evaluate possible risks related to financial management and other activities of audited persons,
(c) recommend improvements in financial management of audited persons and minimisation of risks,
(d) perform other activities as provided for under specific legislation.12c)


Section 35c

 

(1) Persons authorised to conduct government audits on behalf of the ministry of finance are: the government auditor of the ministry of finance, an employee of the control body where such control body is the ministry of finance, or the internal auditor of the ministry of finance. Persons authorised to conduct government audits on behalf of financial control administrations are: the government auditor of the relevant financial control administration or a civil service employee of the relevant financial control administration. Persons authorised to perform government audits on behalf of a ministry under Section 35a, paragraph 3, are the government auditor of the relevant ministry under Section 35a, paragraph 3, an employee of the control body where such control body is the ministry under Section 35a, paragraph 3, or an internal auditor of the ministry under Section 35a, paragraph 3. In case of government audits performed by other legal persons pursuant to Section 35a, paragraph 6, persons authorised to perform those audits are government auditors of the legal person or employees of the legal person concerned.

(2) Government auditors of financial control administrations, civil service employees of financial control administrations, government auditors of ministries under Section 35a, paragraph 3, employees of the control body where such control body is a ministry under Section 35a, paragraph 3, internal auditors of ministries under Section 35a, paragraph 3, subject to the consent of the relevant minister, government auditors of other legal persons under Section 35a, paragraph 6, and employees of other legal persons under Section 35, paragraph 6, shall be able to participate in government audits in case the ministry of finance carries out government audits concerning
(a) State budget funds and European Union funds designated for financing joint programmes of the Slovak Republic and the European Union,
(b) funds received from abroad not referred to in (a) provided on the basis of international treaties that are binding on the Slovak Republic,
(c) State budget funds if their provision is a precondition for the provision of funds according to (b),
(d) own funds of legal or natural persons that are provided such funds.

(3) Government auditors of financial control administrations, civil service employees of financial control administrations, government auditors of other legal persons under Section 35a, paragraph 6, and employees of other legal persons under Section 35a, paragraph 6, shall be able to participate, subject to a prior written consent of the ministry of finance, also in the performance of government audits carried out in the audited person by another ministry under Section 35a, paragraph 3.

(4) Government audits shall be performed on the basis of government audit mandates issued in writing by the head of the relevant audit body. Government audits referred to in paragraph 1 above may be performed only under the lead of government auditors unless this act provides otherwise.

(5) Government auditors of the ministry of finance, government auditors of financial control administrations, and government auditors of other legal persons under Section 35a, paragraph 6, shall be appointed or recalled by the minister of finance.
 
(6) Government auditors of ministries referred to in Section 35a, paragraph 3, shall be appointed or recalled by the relevant minister in consultation with the minister of finance. The relevant minister shall notify the ministry of finance of the appointment or recall of a government auditor within 30 calendar days from the date of the government auditor’s appointment or recall.

(7) Government auditors may be appointed from among civil servants and employees of other legal persons under Section 35a, paragraph 6, who meet specific qualification requirements, namely:
(a) professional competence,
(b) at least three years of professional experience in the field of financial control, in the field of control provided for under specific legislation,4) in the field of internal audit or audit performed in accordance with specific legislation.4a)

(8) For the purposes of this act, professional competence shall mean the body of knowledge and practical experience needed to perform government audits. Professional competence shall be demonstrated by the presentation of a qualifying examination certificate.

(9) Professional experience shall be demonstrated by the documents certifying the length and the scope of professional experience in the fields set forth in paragraph 6(b).

(10) The aim of a qualifying examination is to verify the knowledge of
(a) this act, other generally binding legal provisions enacted with a view to its implementation, and specific legal provisions1) relating to government audits,
(b) internationally recognised accounting standards,
(c) procedures, concepts and other publicly accessible documents related to government audits.

(11) The topics, the date and the place of qualifying examinations shall be published on the website of the ministry of finance not later than 60 days prior to the date of the qualifying examination.

(12) The qualifying examination shall be held upon a written request from a candidate – a civil servant of the audit body (hereinafter the “candidate”) – to sit a qualifying examination, filed no later than 30 days before the examination date. The candidate shall file a written request for sitting a qualifying examination to the minister of finance, subject to a prior written consent from the head of the audit body; no such prior written consent shall be required where the audit body is the ministry of finance.

(13) The qualifying examination shall be held in the State language before an examination commission. The qualifying examination shall consist of a written and an oral part. The candidate may proceed to the oral part of the qualifying examination only after he/she has passed its written part.
 
(14) The examination commission shall consist of at least three members. Members and the chair of the examination commission shall be appointed or recalled by the minister of finance. The examination commission shall have a quorum for administering a qualifying examination and deciding on its result by a majority of its members all of whom must be present. The details of the examination commission and its work shall be laid down in the examination commission’s statute to be issued by the ministry of finance.

(15) The examination commission shall separately evaluate each part of the qualifying examination and decide that the candidate “passed” or “did not pass”. The examination commission shall draw up the minutes on the course of the qualifying examination and on its evaluation signed by all present members of the examination commission. The content of the minutes and the course of the qualifying examination shall be set out in examination rules to be issued by the ministry of finance.

(16) The ministry of finance shall notify the result of the qualifying examination to the candidate within 30 days of the examination. The notification of a successful candidate on the result of the qualifying examination shall also include a certificate on the qualifying examination. The candidates who have not passed the qualifying examination may sit the examination at the nearest qualifying examination date if they file a new written application for a qualifying examination; the provision of paragraph 11, second sentence, shall apply by analogy.
 

Basic rules of government audits

 

Section 35d

 

(1) Besides their powers under Section 13, paragraph 1, persons referred to in Section 35c, paragraph 1, shall be authorised to request the audited person to notify them in writing of the measures adopted to correct the deficiencies identified by the government audit and to eliminate their underlying causes.

(2) The duties set forth in Section 13, paragraph 2(a), (b), (c) and (k), shall apply by analogy to persons referred to in Section 35c, paragraph 1.

(3) Persons referred to in Section 35c, paragraph 1, shall draw up a preliminary report on government audit findings (hereinafter a “preliminary report”), a preliminary partial report on government audit (hereinafter a “preliminary partial report"), a partial report or a government audit report.

(4) A partial report
(a) shall be drawn up where
1. it is necessary to adopt, without undue delay, measures to correct the deficiencies identified by the government audit and to eliminate their underlying causes,
2. the deficiencies identified by the government give rise to a reasonable suspicion that a criminal offence, infraction or administrative misdemeanour may have been committed,
(b) may be drawn up if the government audit is performed in more than one audited person.

(5) Moreover, persons referred to in Section 35c, paragraph 1, shall have the obligation
(a) to make the preliminary report available to the audited person and to set the time limit for the audited person to file written objections challenging the truthfulness of and evidence presented to prove the deficiencies identified by the government audit, and objection against recommendations of the preliminary report,
(b) to verify whether the objections filed under subparagraph (a) are substantiated and, should this not be the case, to notify the audited person thereof not later than by the time of consideration of the preliminary report,
(c) to consider the preliminary report with the audited person, focusing mainly on the objections filed under subparagraph (a) which the audit body found to be unsubstantiated, and to record the results of such consideration in the minutes,
(d) to prepare a report on the government audit after consideration of the preliminary report,
(e) to serve the government audit report on the audited person.

(6) Besides the rights set forth in Section 14, paragraph 1(a) and (b), the audited person shall be authorised
(a) to file written objections under paragraph 5(a) within the fixed time limit,
(b) to request the presentation of a preliminary report or of a government audit report.

(7) The obligations set forth in Section 14, paragraphs 2(a) to (e) and (i), shall apply to the audited entity and to its employees by analogy.

(8) Moreover, the audited person and its employees shall have the obligation
(a) to participate in the consideration of a preliminary report,
(b) to take account of the recommendations contained in the government audit report by adopting measures to correct the deficiencies identified by the government audit and to eliminate their underlying causes, to communicate them to the audit body in writing or to communicate the reasons for not having taken account of these recommendations the audit body within the time limit set out in the government audit report,
(c) to take measures to correct the deficiencies identified by the government audit and to eliminate their underlying causes even where the government audit report did not make any recommendations, and to communicate them in writing to the audit body within the time limit set out in the government audit report,
(d) to submit a written report on the implementation of measures to correct the deficiencies identified in the government audit and eliminate their underlying causes, and on the taking into account of recommendations referred to in (b) within the time limit set out in the government audit report.

 (9) The provisions of introductory sentence to Section 13, paragraph 1, introductory sentence to Section 14, paragraph 2, and of Section 14a shall apply to government audits by analogy.

 (10) The provision of paragraph 4 shall apply to a preliminary partial report by analogy. The procedure referred to in paragraphs 5, 6, 8 and 9 shall apply to preliminary partial reports and to partial reports by analogy.


Section 35e

 

(1) A preliminary report shall specify
(a) the name of the audit body,
(b) the number of the written request for the performance of a government audit and the date of its issuance,
(c) the names and surnames of persons referred to in Section 35c, paragraph 1,
(d) the designation and address of the audited person and its identification number, where such number was assigned,
(e) the subject of the government audit and the audit period,
(f) the place and time of the government audit,
(g) description of the findings and/or deficiencies identified by the government audit and the details of the violation of specific legal regulations,1) concluded contracts,13aa) international treaties binding on the Slovak Republic on the basis of which the Slovak Republic receives funds from abroad, and decisions issued under specific legislation13ab), supported by accounting documents, other documents and papers demonstrating the deficiencies identified by the government audit,
(h) recommendations for improvements of financial management and other activities of the audited person, should the seriousness of the findings make this necessary,
(i) the date of submission of a preliminary report,
(j) signatures of persons referred to in Section 35c, paragraph 1,
(k) the time limit for filing objections under Section 35d, paragraph 5(a),
(l) information on the preparation and content of a partial report,
(m) other data where the subject of the government audit and the seriousness of the findings make this necessary.

(2) Paragraph 1 shall apply to the particulars of preliminary partial reports by analogy.

(3) Paragraph 1(a) to (f), (i), (j), (l) and (m) shall apply to the particulars of government audit reports by analogy. In addition to these particulars, government audit reports shall specify
(a) the date of service of a preliminary report on the audited person,
(b) information on whether the audited person has filed any objections under Section 35d, paragraph 5(a),
(c) the date of consideration of the preliminary report,
(d) the manner of handling objections filed under Section 35d, paragraph 5(a),
(e) the particulars set forth in paragraph 1(g) and (h), taking account of the consideration of the preliminary report as described in the minutes from its consideration; accounting documents, other documents and papers giving evidence of the deficiencies identified by the government audit shall be attached as annexes to the government audit report,
(f) the time limit for adopting measures to correct the deficiencies identified by the government audit and to eliminate their underlying causes,
(g) the time limit for the submission of a written report on the implementation of measures to correct the deficiencies identified by the government audit and to eliminate their underlying causes.

(4) Paragraph 3 shall apply to the particulars of partial reports by analogy.

(5) A government audit shall be concluded with the service of the government audit report on the audited person. The service of a partial report concludes the part of the government audit which is covered by the partial report.

(6) A government audit report or a partial report shall be deemed to have been served, even if the audited person refused to accept it, as on the day of the refusal to accept it.

(7) Audit bodies shall have the obligation to draw up annual reports on the results of government audits, giving mainly the number of government audits performed, the deficiencies identified by government audits, recommendations for improving financial management and other activities of the audited person, and measures to correct the deficiencies identified by government audits and to eliminate their underlying causes, and to submit the report for the given calendar year to the ministry of finance by the end of February of the next year. When the audit body is a financial control administration which performs an ex-post financial control, it shall be obliged to prepare an annual report on the results of the government audit, which shall also include the data on ex-post financial controls carried out under Section 6, paragraph 6.

(8) Details on the content of annual reports on the findings of government audits shall be set out in a generally binding legal regulation to be issued by the ministry of finance.


Section 35f

 

(1) An employee of another public authority, except for employees of the Supreme Audit Office of the Slovak Republic, or an employee of a legal or natural person may, on a request from the head of the audit body, be invited to participate in a government audit, where this is necessary because of the complexity and professional focus of audited activities, subject to the consent of the head of the relevant authority or consent of the relevant legal or natural person, as appropriate. The participation of persons invited to take part in the government audit shall be considered as another transaction in general interest.

(2) The rights under Section 13, paragraph 1, and the duties under Section 13, paragraph 2 (a) to (c) and (e) shall apply to invited persons by analogy.

(3) The costs incurred in connection with government audits shall be governed by Section 25 by analogy.


Section 35g

 

Specialised training of government auditors

(1) Specialised training of government auditors shall consist of systematic acquisition, refreshment, maintenance and deepening of theoretical knowledge and professional skills throughout the entire performance of government audits.

 (2) Government auditors shall be obliged to participate in specialised training of government auditors organised by the ministry of finance. The ministry of finance may also give government auditors credit for their participation in other forms of training, provided that the professional level, subject matter and quality of such other training are comparable with specialised training of government auditors organised by the ministry of finance.

 (3) The ministry of finance may also recognise independent lecturing activities of a government auditor as part of the content of specialised training for government auditors, but can only give him/her one credit for lecturing on the same theme.

 (4) Evaluation criteria and procedures related to specialised training of government auditors shall be determined by the ministry of finance. Compliance with the requirements for specialised training of government auditors shall be overseen by the ministry of finance.

 (5) If a government auditor fails to participate in specialised training for government auditors, he/she may be recalled in accordance with Section 35c, paragraphs 4 and 5.


PART FIVE
FINES

 

Section 36

 

(1) In case of non-fulfilment of obligations set forth in Section 14, paragraph 2, Section 14a or Section 35d, paragraphs 7 and 8, a control body or an audit body may impose
(a) a fine of up to SKK 1,000,000 on the audited entity or the audited person,
(b) a fine of up to SKK 30,000 on employees of the controlled entity, employees of the audited person or on a third party. 
 
(2) The imposition of a fine under paragraph 1 above shall not affect the obligations the violation of which gave rise to the fine.

(3) The fine referred to in paragraph 1 may be applied repeatedly.

(4) When imposing a fine under paragraph 1, a control body or an audit body shall consider the nature, seriousness, duration and consequences of the violation of obligations.

(5) Fines referred to in paragraph 1 may be imposed within one year from the date on which a control body or an audit body gained knowledge of the violation of obligations, but not later than within five years from the date of violation.

(6) The fine shall be payable within 15 days of the date on which the decision on imposing the fine became final.


Section 37

 

(1) In case of violation of obligations set forth in Section 6, paragraph 6, Section 26, paragraph 1, and Section 35a, paragraph 7, the ministry of finance may impose a fine of up to SKK 100,000 on the relevant central authority or audit body.
 
(2) The ministry of finance may impose a fine of up to SKK 100,000 on the head of an internal audit unit, an independent internal auditor or a recalled internal auditor for the violation of obligations set forth in Section 31a, paragraph 1(a) and (b), and paragraph 2.

(3) The provisions of Section 36, paragraphs 2 to 6, shall apply by analogy to the imposition of fines under paragraphs 1 and 2.


Section 38

 

(1) The fines imposed under this act shall constitute revenues for the State budget or for the budgets of municipalities or self-governing regions depending on which control body or audit body has imposed the fine.

(2) Fine imposition proceedings under this act shall be governed by general legislative provisions on administrative procedure.15)


PART SIX
COMMON AND TRANSITIONAL PROVISIONS

 

Section 39

 

(1) Employees of a control body, invited persons, internal auditors, civil servants in financial control administrations, government auditors and employees of other legal persons under Section 35a, paragraph 6, shall be obliged to maintain secrecy of any fact of which they gained knowledge during the performance of the activities provided for in this act. They shall continue to be under this obligation even after the termination of their employment relationship, performance of civil service, performance of work in public interest, or activity performance.

(2) The provision of paragraph 1 shall not prejudice the provisions under specific legislation.18)

(3) The secrecy obligation of persons referred to in paragraph 1 may be lifted by the head of a control body, the head of a central authority, or the head of an audit body.


Section 40

 

The provisions of this act shall apply unless an international treaty)18a) binding on the Slovak Republic provides otherwise.


Section 41

 

(1) Financial controls, controls of the management of funds designated for the execution of state administration tasks, and controls of the management of State budget funds, including the imposition of administrative fines, that had been initiated prior to the entry into effect of this act, shall be governed by the legislation in force at the time.

(2) Central authorities shall be obliged to ensure the performance of internal audits within six months of the date of entry into effect of this act.
 
(3) Annual reports referred to in Section 6, paragraph 4, and Section 31a, paragraph 1(b), shall be drawn up for the first time in 2003.

(4) The heads of internal audit units or independent internal auditors shall be obliged to draw up and submit for approval by the head of the relevant central authority, not later than by 31 December 2005, an Internal Audit Charter of the relevant central authority in compliance with the code of ethics of internal auditors, defining the objectives, activities, and status of internal audit within the relevant central authority and its relationships with other organisational units and organisations falling under the competence of the relevant central authority.


Section 41a

 

Financial controls and internal audits initiated prior to the entry into effect of this act shall be governed by the legislation in force at the time.


Section 41b

(1) Financial control and internal audit procedures initiated before 1 June 2008 shall be concluded in accordance with the legislation in force at the time.

(2) Proceedings on the imposition of fines that were initiated and were not finally concluded by 31 May 2008 shall be concluded in accordance with the legislation in force at the time. The time limits for the imposition of fines referred to in Section 36, paragraph 5, of the wording effective from 1 June 2008 shall be applied for the first time in fine imposition proceedings concerning the violation of obligations of which a control body gained knowledge after 31 May 2008.

(3) Annual reports referred to in Section 35e, paragraph 7, of the wording effective from 1 June 2008 shall be drawn up for the first time in 2009 in respect of 2008.

(4) No later than until 1 January 2011, government audits may be performed also under the lead of an employee of the ministry of finance acting as the control body, an internal auditor of the ministry of finance, a civil servant of a financial control administration, an employee of the ministry of finance acting as a control body under Section 35a, paragraph 3, of the wording in force from 1 June 2008, an internal auditor of the ministry under Section 35a, paragraph 3, of the wording in force from 1 June 2008, or an employee of another legal person under Section 35a, paragraph 6, of the wording in force from 1 April 2010.

(5) If persons referred to in paragraph 4 wish to lead the performance of government audits after 1 January 2011, they shall be obliged to comply with special qualification requirements set forth in Section 35c, paragraph 6, of the wording in force from 1 June 2008.


Entry into effect

Act No. 502/2001 Coll. entered into effect on 1 January 2002.
Act No. 618/2004 Coll. entered into effect on 1 January 2005.
Act No. 165/2008 Coll. entered into effect on 1 June 2008.
Act No. 264/2008 Coll. entered into effect on 1 August 2008.
Act No. 57/2010 Coll. entered into effect on 1 April 2010.

 

 


Pavol Paška in his own hand


1) See, e.g., Council Regulation (EC, EURATOM) No. 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (Special edition of OJ EU, Chapter 1/ Volume 4; OJ EC L 248, 16.9.2002), Council Regulation (EC) No. 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No. 1260/1999 (OJ EÚ L 210, 31.7. 2006), Council Regulation (EC) No. 1198/2006 of 27 July 2006 on the European Fisheries Fund (OJ EU L 223, 15.8.2006), Council Regulation (EC) No. 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (OJ EU L 277, 27.10.2005), Act No. 523/2004 Coll. on budgetary rules in public administration and on the amendment to certain other acts as amended, Act No. 25/2006 Coll. on public procurement and on the amendment to certain other acts as amended.
3) Act No. 575/2001 Coll. on the organisation of government activities and of central state administration as amended.
4) See, e.g., Act of the National Council of the Slovak Republic No. 39/1993Coll. on the Supreme Audit Office of the Slovak Republic as amended, Act of the National Council of the Slovak Republic No. 10/1996 Coll. on control in state administration as amended, Act No. 461/2003 Coll. on social insurance as amended, Act No. 528/2008 Coll. on assistance and support provided from European Community funds as amended.
4a) See, e.g., Act No. 540/2007 Coll. on auditors, audit and audit oversight on auditors and amendment to Act No. 431/2002 Coll. on accounting as amended.
5) See, e.g., Act No. 523/2004 Coll. as amended, Act No. 583/2004 Coll. on budgetary rules in territorial self-government and on amendment to certain other acts as amended.
6) See, e.g., Act No. 523/2004 Coll., Act No. 283/2002 Coll. on travel expenses reimbursements, Act No. 523/2003 Coll. on public procurement amending Act No. 575/2001 Coll. on the organisation of government activities and of central state administration as amended
7) See, e.g., Section 4 of Act No. 73/1998 Coll. on civil service of officers of Police Force, Slovak Intelligence Service, Corps of Prison and Court Guard of the Slovak Republic and Railway Police as amended, Section 9 of the Labour Code, Section 9 of Act No. 312/2001 Coll. on civil service and on amendment to certain other acts as amended, Section 7 of Act No. 346/2005 Coll. on civil service of professional soldiers of armed forces of the Slovak Republic and on amendment to certain other acts as amended by Act No. 253/2007 Coll.
7a) Section 2 (a), (e) and (f) of Act No. 523/2004 Coll. as amended.
Act No. 581/2004 Coll. on health insurance companies, supervision of health care and on amendment to certain other acts as amended.
7b) Section 3 of Act No. 523/2004 Coll.
7c) Section 2 (e) of Act No. 523/2004 Coll. as amended.
8) Section 9 of Act No. 523/2004 Coll.
12) Section 22, paragraph 2, of Act No. 523/2004 Coll.
12a) See, e.g., Act of the National Council of the Slovak Republic No. 278/1993 Coll. on administration of state assets as amended, Act No. 231/1999 Coll. on state aid as amended, Act No. 264/2008 Coll. on fiscal stamps and on amendment to certain other acts.
12b) See, e.g., Act No. 440/2000 Coll. on administrations of financial control as amended.
12c) See, e.g., Article 62 of Regulation No. 1083/2006 as amended, Article 61 of Regulation (EC) No. 1198/2006 as amended by Regulation (EC) No. 846/2009, Article 25, paragraph 1(c), of Decision No. 573/2007/EC of the European Parliament and of the Council establishing the European Refugee Fund for the period 2008 to 2013 as part of the General programme ‘Solidarity and Management of Migration Flows’ and repealing Council Decision 2004/904/EC (OJ EC L 144, 6.6.2007), Article 27, paragraph 1(c) of Decision No 574/2007/EC of the European Parliament and of the Council of 23 May 2007 establishing the External Borders Fund for the period 2007 to 2013 as part of the General programme ‘Solidarity and Management of Migration Flows’ (OJ EU L 144, 6.6.2007), Article 25, paragraph 1(c) of Decision No. 575/2007/EC of the European Parliament and of the Council of 23 May 2007 establishing the European Return Fund for the period 2008 to 2013 as part of the General Programme ‘Solidarity and Management of Migration Flows’ (OJ EU L 144, 6.6.2007), Article 23, paragraph 1(c) of Council Decision 2007/435/EC of 25 June 2007 establishing the European Fund for the Integration of third-country nationals for the period 2007 to 2013 as part of the General programme ‘Solidarity and Management of Migration Flows’ (OJ EU L 168, 28.6.2007).
12d) See, e.g., Article 61 of Regulation (EC) No. 1083/2006 as amended version, Article 20 of Council Regulation (EC) No. 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No. 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, European Parliament and Council (EC) Regulation No. 1080/2006 on the European Regional Development Fund, Article 60 of Regulation (EC) No. 1198/2006 as amended by Regulation (EC) No. 846/2009.
12e) See, e.g., Council Regulation (ES, EURATOM) No. 1605/2002 of 25 June 2002 (Special edition of OJ EU, Chapter 1/Volume 4; OJ EC L 248, 16.9.2002).
13) See, e.g., the Labour Code.
13a) Act of National Council of the Slovak Republic No. 46/1993 Coll. on the Slovak Intelligence Service as amended.
Act of National Council of the Slovak Republic No. 171/1993 Coll. on the Police Force Corps as amended.
Act of National Council of the Slovak Republic No. 198/1994 Coll. on Military Intelligence Service as amended.
Act No. 57/1998 Coll. on the Railway Police Force as amended.
Act No. 4/2001 Coll. on the Corps of Prison and Court Guard as amended.
Act No. 315/2001 Coll. on the Fire and Rescue Corps as amended.
Act No. 129/2002 Coll. on the integrated rescue system as amended.
Act No. 321/2002 Coll. on the Armed Forces of the Slovak Republic as amended.
Act No. 652/2004 Coll. on bodies of state administration in the customs system and amendment to certain other acts as amended.
13aa) The Civil Code.
The Commercial Code.
13ab) See, e.g., Act No. 543/2007 Coll. on competencies of state administration authorities in the provision of support to agriculture and development of rural areas.
13b) Act of National Council of the Slovak Republic No. 46/1993 Coll. as amended.
Act No. 215/2004 Coll. on the protection of classified information and on amendment to certain other acts as amended.
14) See, e.g., the Criminal Procedure Code as amended, Act of the Slovak National Council No. 372/1990 Coll. on infractions as amended, Act of the Slovak National Council No. 511/1992 Coll. on tax and fees administration and on changes in the system of territorial financial authorities as amended, Act No. 367/2000 Coll. on the protection against legalisation of proceeds from crime and on amendment to certain other acts.
15) Act No. 71/1967 Coll. on administrative proceedings (Administrative Procedure Code) as amended.
16) See, e.g., Labour Code, Act No. 312/2001 Coll. as amended, Act No. 552/2003 Coll. on the performance of work in public interest as amended, Act No. 553/2003 Coll. on remuneration of certain employees performing work in public interest and on amendment to certain acts.
17) See, e.g., Act No. 283/2002 Coll.
17c) See, e.g., Section 35 of Act No. 73/1998 Coll. as amended, Section 55 of the Labour Code, Sections 27 to 35a of Act No. 312/2001 Coll. as amended.
17d) See, e.g., Section 189 of Act No. 73/1998 Coll. as amended by Act No. 201/2004 Coll., Section 59 of the Labour Code, Section 39 paragraphs 1 and 2 and Sections 40 to 43 of Act No. 312/2001 Coll. as amended, Sections 69 to 80 of Act No. 346/2005 Coll. as amended by Act No. 253/2007 Coll.
17e) Act of the National Council of the Slovak Republic No. 39/1993 Coll. on the Supreme Audit Office of the Slovak Republic as amended.
Act of the National Council of the Slovak Republic No. 46/1993Coll. as amended
Act of the National Council of the Slovak Republic No. 198/1994 Coll. as amended.
18) Act No. 211/2000 Coll. on free access to information and on modifying and amending certain other acts (the Freedom of Information Act).
18a) See, e.g., Communication No. 130/2002 Coll. of the Ministry of Foreign Affairs of the Slovak Republic on the signature of the Multiannual Financial Agreement between the Commission of the European Communities on behalf of the European Community and the Slovak Republic, and of the Annual Financial Agreement between the Commission of the European Communities on Behalf of the European Community and the Slovak Republic.
18ab) See, e.g., Article 59 of Regulation (EC) No. 1083/2006 as amended, Article 58 of Regulation (EC) No. 1198/2006 as amended by Regulation (EC) No. 846/2009, Article 25, paragraph 1(a) of Decision No 573/2007/EC of the European Parliament and of the Council, Article 27, paragraph (a) of Decision No. 574/2007/EC of the European Parliament and of the Council, Article 25, paragraph 1(a) of Decision No. 575/2007/EC of the European Parliament and of the Council, Article 23, paragraph 1(a) of Council Decision No. 2007/435/EC.
18ac) Council Regulation (EC, EURATOM) No. 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities' own resources (Special edition of OJ EU, Chapter 01/Vol. 03) as amended by Council Regulation (EC, EURATOM) No. 2028/2004 of 16 November 2004 (OJ L 352, 27.11.2004).
18ad) Section 5, paragraph 1(g), (h) and (j), and Section 6, paragraph 1(g), (h) and (j) of Act No. 583/2004 Coll.
18ae) Act No. 111/1990 Coll. on State undertaking as amended.
18af) See, e.g., Commission Regulation (EC) No. 1828/2006 (OJ EU L 371, 27.12.2006), Articles 2 to 8 of Commission Regulation (EC) No. 1386/2002 of 29 July 2002 laying down detailed rules for the implementation of Council Regulation (EC) No. 1164/94 as regards the management and control systems for assistance granted from the Cohesion Fund and the procedure for making financial corrections (Special edition of OJ EU, Chapter 14/Vol. 01), Article 60 of Council Regulation (EC) No. 1083/2006 (OJ EU L 210, 31.7.2006), Article 59 of Council Regulation (EC) No. 1198/2006 (OJ EU L 223, 15.8.2006).