The Office for the Audit of Institutions in FBiH could not perform financial control in a number of institutions in the field of social protection.
This area is under the authority of the Federal Ministry of Labor and Social Protection. This ministry is headed by Minister Adnan Delić.
Namely, according to the plan, the federal auditors were supposed to audit the Institution for Social Welfare and Health Care in Ljubuški and the Institution for Social Welfare, Health Care, Education and Pazarić.
Drin and Bakovići
Also, the audit should have been carried out in the Institution for Social Care and Health Care in Drin, the Institution for Social Care and Health Care in Bakovići, and in the Institution for Social Care and Education in Sarajevo.
The founder of these institutions is the FBiH Parliament. Namely, the auditors state that these are public institutions that have the status of a legal entity and that carry out their activities in accordance with the Law on Social Protection Institutions of the FBiH.
“In order to determine whether there are prerequisites for an audit, one of the requirements is to determine whether the financial reporting framework that the auditee used to prepare the financial statements is acceptable. The applicable financial reporting framework provides the criteria that the auditor uses to audit the financial statements.
Including, where relevant, their fair presentation. “Without an acceptable financial reporting framework, management does not have an appropriate basis for compiling financial statements and the auditor does not have appropriate criteria for auditing financial statements,” the auditors pointed out.
They additionally clarified that the current Law on Institutions entered into force on August 20, 2022, after the Office performed financial audits of four institutions for 2019 and 2020, which led to changed circumstances. In other words, the amendments to that law made it impossible for auditors to perform this audit in accordance with international standards.
Law on budgets of the FBiH
“Article 69, paragraph 4 of the Law on Institutions defines that federal social welfare institutions conduct financial operations, that is, financial reporting and business books according to the analytical chart of accounts for the budget and budget users of the Federation. However, the provision of Article 69, paragraph 4 of this Law contradicts the provisions of the Law on Budgets in the FBiH and its by-laws, given that institutions are extra-budgetary users according to that law,” the federal auditors pointed out, among other things.
By the way, the FBiH Institutional Audit Office performed financial audits of four institutions in previous years, on which audit reports were drawn up and published. In the opinion, the unevenness in keeping business books and financial reporting at the audited institutions was pointed out even then.
Auditors previously warned that the Draft Law on Social Institutions did not define the financial reporting framework for federal social welfare institutions. Despite this, this law was, as stated, adopted in 2022.
