This book on public internal financial control was published in Brussels in 2007 and aims at explaining the reader how the European Commission got involved in the field of public finance management in the candidate countries that were to become Member States in 2004 and 2007.

Brief Chapter descriptions

Chapter 1 “Ten easy steps” towards PIƒC

Reflections on corruption in the public sector, its causes, features, cost and ways to fight it; the concept of PIƒC and its role as the basis for practical solutions in reforming those parts of the national administration that are responsible for developing management, control and internal audit; the “simple” 10-step implementation.

Chapter 2 Internal Control in the Public Sector

The variety of internal control systems in EU Member States; the Commission’s analysis of existing public control systems in applicant countries; the lack of a common concept relating to internal control, internal as well as external audit; developing a strategy for supporting applicant countries in accordance with guidelines developed by SIGMA, the IIA COSO-model and the INTOSAI.

Chapter 3 The three elements of PIƒC

The need for a strong and lasting political commitment from the government to support the PIƒC project; audit trails; self-assessments; risk analysis and risk management; the three elements of PIƒC and the relationship between (traditional) inspection and modern audit, the organisation and functioning of internal audit units; Central Harmonisation Units; national audit boards or audit committees.

Chapter 4 Financial Control Reform in the European Commission

Developments in the area of public internal control outside the scope of the accession negotiations; Sound and Efficient Management (SEM) 2000 and the 2000 White Paper on Commission Reform; the restructuring of the internal control systems in the Commission; recent discussions on the Commission’s roadmap to an integrated internal control framework; internal control developments in a number of EUR-15 Member States.

Chapter 5 The Accession Negotiations

What happens; DG Budget’s role in the negotiations, the Europe Association Agreements, Agenda 2000 and the Accession Partnerships; the purpose and structure of the accession negotiation chapter on Financial Control; co-operation with applicant countries; conceptualisation of the PIƒC elements, drafting a PIƒC Policy Paper, drafting and adopting PIƒC-related framework and implementation legislation, establishing PIƒC-related organisations; training needs for management, controllers and auditors.

Chapter 6 DG Budget’s Toolbox

Administrative co-operation agreements (ACAs) with applicant countries; multilateral and bilateral screening meetings to inform applicant countries of the obligations and opportunities of introducing adequate internal control systems; fact-finding and monitoring missions to Ministries of Finance and Supreme Audit Institutions; training seminars for national civil servants; contributions to Commission Reports and Council Opinions; CHU meetings, Joint Audit Arrangements and the FccWebsite.

Chapter 7 Networking and Technical Assistance

Networking with the Contact Group for European Financial Control Organisations; the Central Harmonisation Units, Ministries of Finance, the Supreme Audit Institutions; technical assistance and national twinning partners from Member States; the DGs concerned (ELARG, RELEX, AIDCO, ECFIN, OLAF); the CHU workshops; the European Parliament (COCOBU); the European Court of Auditors, SIGMA of OECD, the World Bank, PEFA and other institutions like the INTOSAI, the IIA, the ECIIA and the IIA country chapters, PEM-PAL.

Chapter 8 Assessing PIƒC Implementation

Assessing achievements; the drive to find a common terminology and vocabulary; culture and age barriers; external assessments made by the Council and Commission, the European Parliament and the European Court of Auditors; PIƒC in algorithms.

Chapter 9 The future role for PIƒC

A brief overview of the latest PIƒC developments in applicant countries; building public internal control systems in the western Balkans and European Neighbourhood Policy countries: applying the PIƒC concept and drawing benefits from experience elsewhere; a matter of taking a long breath.

Chapter 10 Conclusions