Documents
The state audit act
(Official Gazette/Narodne novine 70/93, 48/95, 105/99, 36/01, 44/01, 177/04)
I. GENERAL PROVISIONS
Article 1
This Act shall regulate the audit of public incomes and expenditures, the audit of financial statements and financial transactions of government units and local and regional self-government units, legal entities being partly or wholly financed from the budget, public enterprises, companies and other legal entities owned in major part by Republic of Croatia or local and regional self-government units, use of EU funds and funds of international organizations or institutions for financing of public needs.
This Act shall also regulate the audit of the procedures of transformation and privatisation in legal entities, which implemented such procedure pursuant to the (i) Act on the transformation of Socially-Owned Enterprises, published in "Narodne Novine" Nos. 19/91, 83/92, 84/92, 94/93, 2/94, 9/95 and 21/96 (hereinafter referred to as the "Transformation Act"), (ii) Privatization Act, published in "Narodne Novine" Nos. 21/96, 71/97 and 16/98, (iii) Social Capital Act, published in "Narodne Novine" Nos. 84/89 and 46/90 and (iv) special laws."
Under this Act, as government incomes and expenditures are understood all incomes and revenues, and expenditures being financed from the state budget or from appropriate funds at the national level, and from the budgets at the level of local and regional self-government units.
Under this Act, as government units are understood all legislative, executive and judiciary bodies, as well as all agencies, institutions and other subjects at the level of the Republic of Croatia and at the level of local and regional self-government units, financed from the state budget or budgets of local and regional self-government units.
Article 2
Under this Act, audit is the examination of documents, deeds, statements, internal control and internal audit systems, accounting and financial procedures, and other records in order to determine whether financial statements truly reflect the financial activities in compliance with accepted accounting principles and accounting standards.
Audit is also a procedure of examining financial transactions which represent government incomes and expenditures in terms of legal utilizations of funds.
Audit also includes an assessment of the efficiency and effectiveness of activities, as well as an assessment of the efficiency in pursuing the objectives of a certain project.
For the purpose of this Act, the transformation and privatization audit means examining the documents, decisions, business records, contracts and acts pursuant to which the transformation and privatization was completed, as well as examining other documentation necessary to establish whether any violation of the provisions of the Restructuring Act, Privatization Act, Social Capital Act or special acts occurred in the procedure of restructuring and privatization.
Article 3
Under Article 2, Para (1), of this Act, audit shall be performed once a year on the state budget, funds at the national level, and budgets of local and regional self-government units.
Audit of the financial statements of government units, local and regional self-government units, public enterprises, companies and other legal entities owned in major part by Republic of Croatia or local and regional self-government units, shall be performed in compliance with the Annual Programme of the State Audit Office.
Audit, in terms of Article 2, Para (2) and (3), of this Act shall be performed as needed.
The extent of auditing shall be defined in the Annual Programme of the State Audit Office.
II. AUDITING PROCEDURE
Article 4
The audit method and procedure shall be performed in compliance with the established INTOSAI Auditing Standards.
The audit standards referred to in Para (1) of this Article shall be published in the Croatian language in "Narodne novine" (Official Gazette).
Audit shall be performed by certified state auditors
A certified state auditor is an independent professional who is in holder of a certificate to this effect and who meets other requirements under this Act, employed with the State Audit Office.
As an exception to Para (3) of this Article, the State Audit Office can engage an expert for dealing with specific problems involved in an audit procedure.
Article 5
A legal representative of a legal entity where an audit is performed shall furnish the certified state auditor with complete required documentation, deeds, statements and other records, as well as provide other information needed for the audit work.
Article 6
A certified state auditor is not allowed to audit:
if he/she is a member of the supervisory committee or another body of the legal entity where the audit work is to be performed;
if he/she was involved in keeping business books or preparing financial statements of the legal entity where the audit work is to be performed;
if he/she is a spouse, a blood relative in the direct line up to the fourth kinship degree, or in the in-law line up to the second kinship degree, a tutor, an adoptive parent, an adopted child, or a foster-parent of one of the legal representatives of the legal entity concerned or of one of the members of the supervisory committee.
Article 7
After completed audit work, the certified state auditor shall prepare and sign the audit report. The audit report shall be prepared in conformity with the audit standards referred to in Article 4, Para. (1), of this Act.
The audit report shall be submitted to the legal representative of the legal entity where the audit has been carried out, to the responsible minister and/or to the fund.
The legal representative of the legal entity where the audit work has been carried out can within 8 days make an objection to the audit report. The Auditor General shall decide on the matter within 30 days.
Article 8
The certified state auditor shall meet the following requirements:
that he/she is citizen of the Republic of Croatia,
that he/she is a graduate economist, graduate lawyer, graduate in IT or in other relevant profession.
that he/she has passed the examination for certified state auditor and acquired an authorized auditor's certificate,
that he/she has never been found guilty for criminal acts in the economy,
that he/she is an honourable and honest person who meets the requirements defined in the Code of Professional Ethics.
The Code of Professional Ethics must be in compliance with Code of Ethics of INTOSAI.
Admitted to the examination qualifying for a certified state auditor shall be those candidates who have at least three-year working experience in relevant profession.
Article 9
Examinations for a certified state auditor shall be taken according to the State Audit Office's programme.
Examination under para (1) of this Article shall be taken before a commission appointed by the Auditor General. Candidates who have passed the examination shall be given the certified state auditor's certificate by the Auditor General.
Prior to sitting for the certified state auditor's examination, candidates shall have passed the general part the civil service examination, unless exempt from this obligation according to the regulations related to civil servants.
III. THE STATE AUDIT OFFICE
Article 10
For performance of work under this Act the State Audit Office shall be established.
The State Audit Office shall be a legal entity.
The State Audit Office shall be directly responsible to the Croatian Parliament (Sabor).
The seat of the State Audit Office shall be in Zagreb.
Article 11
The State Audit Office shall perform the following duties:
planning and conducting of the audit work to an extent as envisaged in Article 2, Para (1) of this Act,
conducting of the audit work to an extent as envisaged in Article 2, Para (2) and (3) of this Act, according to the Annual Programme or as requested by the Croatian Parliament (Sabor),
conducting of the transformation and privatisation audit,
submission of an annual report on executed audits and its own work,
in particular cases of specific interest, submission of individual audit reports,
carrying the annual programme of work.
The report under Para (1), point 4. of this Article shall be submitted to the Croatian Parliament (Sabor), till the end of current year for the previous year.
The Charter of State Audit Office shall be approved by the Croatian Parliament (Sabor).
The State Audit Office shall also perform other duties defined in its Charter.
Article 12
The State Audit Office shall be run by the Auditor General.
The Auditor General shall be appointed by the Croatian Parliament (Sabor) for the term of 8 years and he/she can be reappointed.
The tenure of actual Auditor General is to be assumed as per its original appointment.
Article 13
The Auditor General shall be dismissed before expire of the tenure:
if he/she requests that,
when appointed to the other position with his/her consent,
if permanently looses the capability to carry out the duty, and
if found guilty for a crime which makes him/her unworthy to carry out the duty of Auditor General.
Article 14
After completing the tenure, the Auditor General has the right to be retired under the same legal provisions applicable to members of the Croatian State Parliament.
Article 15
The financial means necessary for the function of the State Audit Office shall be provided by the state budget..
IV. PENAL PROVISIONS
Article 16
For an economic offence a government unit or another legal entity shall be fined kn 3.500,00 to 40.000,00, if it:
fails to furnish the certified state auditor the documents, deeds, statements or other information required for audit (Article 2, Para (1)),
fails to provide or provides wrong information required for audit financial transactions (Article 2, Para (2)),
fails to provide or provides wrong information required for audit work intended to assess the efficiency and effectiveness of activity and/or to assess the efficiency in pursuing the objectives of a project (Article 2, Para (3)),
fails to make available the necessary documentation, fails to furnish, or furnish the wrongful, information needed to conduct the transformation and privatisation audit (Article 2, paragraph 4).
For acts under Para (1) of this Article a legal representative shall also be fined in the amount of kn 1.500,00 to 3.500,00.
TRANSITIONAL AND FINAL PROVISIONS
Article 17
The Social Accounting and Auditing Service (SDK) Act (Official Gazette No. 53/91) shall cease to be effective on the ninetieth day from the day of entering of this Act into force.
- The State Audit Office
- Tkalciceva 19
- 10000 Zagreb
- revizija@revizija.hr
