Turkey – Strenghtening TCA’s Audit

the project to strengthen the Turkish Court of Accounts (TCAs) audit process financed by the World Bank was carried out between February and May 2012. The project was designed in such a fashion that key deliverables were outlined in the Terms of Reference but further refined in discussion between the project consultants and TCA staff with more details presented in the Inception Report delivered at the start of the project. The Inception Report has subsequently formed the basis for the work carried out by the project. The TCA is in the early days of a significant change process which will attempt to implement new approaches to audit in addition to the ‘public loss’ audit approach undertaken by the Court in the past. These changes are built on a foundation of a new legislative framework, initiated by the Public Financial Management and Control Law (PFMC Law), Number 5018, in force December 2003) supplemented by a new TCA Law, Number 6085 (enacted December 2010). The legislative framework has been further reinforced by the development of suitable secondary legislation, such as bylaws for use by the TCA. After consultation with the TCA, the project approached its work in four different areas, namely: – regularity audit – performance information audit – reporting – the overall audit strategy, which brought together the first three areas as well as adding other elements necessary to the delivery of a successful strategy, for example training issues, wider Human Resource implications, the need for an effective communications strategy. Regularity audit, by which is understood both financial and conpliance audit, has been introduced into the mandate of the TCA by the revised legislation. In support of this, a comprehensive Regularity Audit Manual has been prepared by the TCA, which is in widespread use across the organisation. Financial audit, requiring the expression of an audit opinion on the financial statements of auditees, is a new discipline to TCA auditors and will require significant capacity building inside the organisation before it becomes fully effective and embedded in the organisation. Performance audit is also a new disicipline in the form which is required by the revised legislation. In the sense in which it is understood within the TCA it means the audit of performance information rather than ‘value for money’ type audit as ‘performance audit’ is understood in many jurisdictions. This again is a new requirement for the TCA. These new disciplines require revised reporting procedures. Initially, these are at individual audited entity level, so for example a financial audit report will be required for each one audited. However, there is then another layer of combined audit information at a higher level for which audit reports are required (the word ‘consolidated’ information is specifically avoided here as in accounting terms it has a very specific meaning which may be misleading in the context meant here). Five reports are required to be prepared by the TCA by the legislation. Therefore the new audit disciplines in turn generate challenging strategic requirements which need to be met in order for the significant changes facing the TCA to be met