Public internal audit through cooperation, by ACoR’s county branches
About this good practice
According to the law, each public institution must organize its public internal audit activity and have at least 2 employees assigned to it. But not all local authorities can afford this, for reasons of costs and staff. So, following a collaboration with the Ministry of Finance, Association of Communes of Romania implemented, in 8 pilot centers, an innovative system for providing internal public audit through cooperation. This is not outsourced services, but activities realized through cooperation by associative structures of local authorities, with legal personality and recognized as having public utility. For this, each willing commune signs with the belonging ACoR’s County Branch a Cooperation Agreement on the organization of public internal audit, endorsed by local council, for at least 5 years and an average monthly cost. The County Branch acts as the organizer of the public internal audit for the signatory communes and as employer of the auditors, with negotiated, performance-based salaries. The optimal no. of auditors by county is determined on the 3E principle: efficiency, effectiveness and economy. The min. recommended no. of communes by county, in order to mutually benefit from scale advantages, is 5. The number of auditors needed in cooperation is much lower than if each commune would have its own auditors. That means lower costs and higher quality of internal public auditing, as auditors are motivated on performance and receive constantly appropriate training.
Resources needed
For a cooperation of 6-9 communes only 2 auditors are needed. The expenses incurred for each ACoR’s County Branch are settled on the basis of shares agreed within the Cooperation Agreement (an average monthly cost) which is concluded indefinitely, with no right of withdrawal during the first 5 years
Evidence of success
At the end of 2024, the ACoR, through its county branches, carries out public internal audit activities in cooperation in 31 of Romania's 41 counties and 1,772 out of 2,862 communes throughout the country are its beneficiaries. Now there are over 300 motivated and well-trained internal auditors, constituted in a professional association within ACoR, seeking to determine a standardization of documents in local administration and a unique way to address a specific common challenge in the field.
Potential for learning or transfer
It is a new alternative to the classical outsourced services, when the resources of a public institution (human, financial) do not allow the realization of the activity with own employees - activities through cooperation, by associative structures of local authorities recognized as having public utility (the only constraint is whether national legislation allows or not prohibits this). The benefits are significant: lower costs, higher quality of internal auditing (because auditor’s salary is determined by negotiation and depends on the performance achieved), decrease of sanctions imposed by the Court of Accounts, capacity to find and propagate good practices. The practice can be extended to other similar activities within local administration. ACoR has already extended it to other activities such as: accounting, human resources, archiving, urban and spatial planning, debt enforcement, but for now on a smaller scale than public internal audit, which is the oldest and the most developed
Further information
Documents
11. GP_SHARING - ACoR.pdf
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
