Update to the contribution to the progress report on the process of accession of the republic of macedonia to the european union

3.30

3.31FOREIGN, SECURITY AND DEFENCE POLICY

3.31.1 ESDP

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On 8 July 2008 the Republic of Macedonia completed its participation in Althea with the helicopter detachment after the accomplishment of the four rotations within the period July 2006 – July 2008. The current contribution of the Republic of Macedonia to Althea consists of 10 medical staff, 1 assistant legal advisor, and 1 NCO (Non-Commission Officer) for preventive medicine at the HQ EUFOR. Currently, ongoing is the fourth rotation of the medical team, the third rotation of the assistant legal advisor at the HQ EUFOR and the second rotation of the NCO for preventive medicine).

According to the shown interest of the Republic of Macedonia to participate in the EU Police mission in Afghanistan (EUPOL AFGHANISTAN), the Ministry of Interior, as a competent institution which declared personnel for eventual participation in civilian ESDP missions for crisis management, is considering of seconding police officers in police mission EUPOL AFGHANISTAN.
On 25 and 26 September Regional ESDP Conference took place in Ohrid, initiated by the Ministry of Defence of Republic of Macedonia.
3.31.2 CFSP

Republic of Macedonia continued to align itself to EU documents on current international issues submitted in different international organisations. According to the Law on implementation of International Restrictive Measures the Government adopted a Decision for implementation of the Council Decision 2008/614/CFSP of 24 July 2008 implementing Common Position 2004/293/CFSP renewing measures in support of the effective implementation of the mandate of the International Criminal Tribunal for the former Yugoslavia (ICT

The technical installation of the Certified Computer Unit for Access to the EU Network for Electronic Exchange of Classified CFSP Information (ACN) within the MFA is in its final phase. The EU Council has delivered the ACN equipment to the MFA and to the Mission to the European Communities in Brussels during the month of August, and its installation was carried out at the end of August 2008. Ongoing is the procedure for new employments within the Unit for CFSP, the Unit for armament and the Unit for EU law.

3.32FINANCIAL CONTROL

1. PUBLIC INTERNAL FINANCIAL CONTROL AND EXTERNAL AUDIT

1.1 PUBLIC INTERNAL FINANCIAL CONTROL

According to one of the main goals of the Twining project producing and implementing internal acts in 10 pilot institutions for training for writing internal procedures were organised by the Ministry of Finance. Within the all institutions involved, working meetings were held with the state secretaries, head of departments and deputy head of departments about the importance of writing internal procedures, the way of how that is done, coordinating role of the Ministry of Finance and the future planned common activities. About the importance of establishing of effective system of public internal financial control in the public sector and examples of Dutch practice, a presentation was carried out in front of General collegiums of the Government of Republic Macedonia.
Ten pilot institutions of the public sector already have produced procedures for their primary and secondary processes. Together with the Dutch experts and employees in the Public Internal Financial Control Departments procedures that were already prepared were commented, adjustment were made and the next step is to make an audit of implementations of the procedures prepared.
Activities for strengthening of the capacities of Macedonian side in the twining in order taking over of the leading role by the Ministry of Finance in implementing financial management and control system along with the EU standards were planned and performed. Macedonian side was fully included in the process of producing internal acts in the line institutions of the public sector, emphasizing the coordinating role of the Ministry of Finance and training Train the trainers for the staff involved was successfully carried on.

1.1.2 INTERNAL AUDIT

The function of the internal audit in the public sector in the Republic of Macedonia is organised within 74 internal audit units founded in the subjects of the public sector on a central and local level, staffed with 116 internal auditors.
The Ministry of Finance - Public Internal Financial Control Department is competent for regulation, development, and reconciliation of the internal audit in the public sector. So far, 39 units for internal audit were established in the institutions on a central level, with 83 appointed internal auditors. On the local level, in 47 municipalities internal audit function is implemented with 33 appointed internal auditors. Fourtheen municipalities have made agreement for performing of the internal audit function by internal audit unit of other municipality.
In order to integrate existing Law for internal audit in the public sector and Law for public internal financial control and to provide a legal framework for certification of the internal auditors from the public sector, a new version of Law for public internal financial control has been drafted.
In January 2008 Minister of finance adopted the Rulebook for the form, contents and the way of submission of the report (statement) for the quality and the condition of the internal financial controls in the public sector, which prescribes a form for preparing annual report for the performed audits and the activities of the internal audit, as well.
In order to strengthen independence of the internal audit units in public sector, CHU within Ministry of Finance prepared new template of the Internal Audit Charter. Following that template, 32 central level and 28 local level Internal Audit Units adopted a new Internal Audit Charter.

So far, within the frames of the Twinning project “Strengthening the Public Internal Financial Control System”, in cooperation with the twinning partner the Ministry of Finance of the Kingdom of the Netherlands, specialised training for the Heads of Internal Audit Units and training for trainers were realised for internal auditors on a central level.

1.2 EXTERNAL AUDIT

Regarding the additional staffing of the State Audit Office (SAO), there were two job announcements in November 2007 and March 2008, recruiting 11 new employees. Currently SAO has 94 employees, including the staff seconded to Audit Authority, of which 67 are involved in audit tasks.
A new SAO development Strategy (2008-2012) has been adopted which includes policy on human resources and communications.
SAO has adopted drafted guidelines on: audit quality, follow-up audit report and on the new format of financial audit report and has drafted guidelines on audit programming; audit reporting and materiality issues.

2008 Plan on Professional Education of State Auditors was adopted. On the basis of this Plan, training on IT was carried out, as well as basic training of financial and performance audit for the newly recruited staff.

In 2007, SAO carried out 98 audits, (91 financial audits and 7 performance audits), producing 188 audit reports on the performed audit of the financial reports. SAO has completed 4 follow-up audits (7 out of 86 audits planned in 2008) in order to enhance the recommendation tracking system.

The SAO has been engaged since September 2005 in a three-year twinning partnership with the Dutch Court of Audit. The project is proposed to be extended for two years under the MATRA pre-accession project programme, starting in January 2009.
In December 2007 SAO signed a joint Protocol of Cooperation with 11 competent authorities in the Republic of Macedonia in supporting the prevention of Conflicts of interest and anti corruption activities.

3.33 FINANCIAL AND BUDGETARY PROVISIONS

With the amendments of the Law on Budgets, new phase in the process of the budget preparation - Development plan and programs, was introduced. The plan is for medium term development projects. In line with this phase, also new content in the Budget of the Republic of Macedonia was added dedicated to development in order to facilitate execution of the budget for development projects.

Additionally, if the budget assigned to certain institution is not spent in the designated period, with the amendments, 50 % of the money can be transferred in the budget of the next year. This opportunity stimulates multi-year planning and spending of the budget, therefore the mid-term projects to be adequately covered in the budget.
Transfer of the money from one to another position in the budget is limited to 15% of the initially allocated money and to 10% when it comes to salaries and social contribution, aiming at further improvement of the budget planning.
In order to strengthen the financial independence of the regulatory and supervisory bodies, amendments of the Law on Budget and Law on Budget Execution were adopted by the parliament in July.
These amendments allow regulatory bodies to decide for spending the budget for new employments without requesting approval from the Ministry of Finance.
Also the new deadline for the supplementary budget is set latest by November 15 in the current fiscal year. This measure enables comprehensive and precise analysis of the budget spending and income planning.

1 A concluded procedure from 2005 in amount of 10.633.461,00 MKD was fully paid up in 2007.

2 1 case: 2 persons sentenced to prison (4 yrs 10 mths; 2 yrs)

1 case: 3 persons sentenced to prison (1yr; 1yr 6mths; 1 yr 7 mths)

1 case: 1 person sentenced to 6mths prison

3 CHANEL, LOUIS VUITTON, CHRISTIAN DIOR, TOMMY HILFIGER, PUMA, ADIDAS and  PROCTER& GAMBLE

4 Rulebook on the procedure for allocation of contributors in mandatory pension funds, manner and procedure of membership in mandatory pension funds in case of a first time membership, manner and procedure of transfer of members from current to future mandatory pension fund and the form of contract for membership in a pension fund;Rulebook on fees related to mandatory pension funds and the manner and period of payment of fees to Pension and Disability Insurance Fund of Macedonia and Rulebook on maximum amount and manner of payment of fees for transfer from one to another pension fund (“Official Gazette of the Republic of Macedonia”No.93/2008)

5 The numbers do not refer to the enforcement requests filed by the State Attorney of the Republic of Macedonia for claims of the state

6 See also Appendixes 4, 5, 6 with grids containing outcome of cases by types of criminal offences

7 The data processing for September will be made in October 2008. The data for August are calculated until 14 August 2008.

8 The official information is practiced when the internal investigations establish a reasonable doubt that the customs officials have violated the legal provisions, sub-legal acts, operative instructions and the Code of Conduct. The official notes are prepared in cases when the internal investigation did not confirm that the customs officials have violated the legal provisions, sub-legal acts, operative instructions and Code of Conduct