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Published Audit Report on Annual Financial Statement of New Serb Democracy for 2014

Podgorica, 29th July 2015 - The State audit institution has performed a financial audit of the Annual financial statement and regularity audit of New Serb Democracy for 2014 related to compliance of its business operations with legal and other relevant regulations.

On a basis of conducted audit, established factual state as well as after deliberation of the auditees' Opinion regarding the Preliminary Report of the SAI, the relevant Auditing Board, composing of Mr. Nikola Kovačević (member of Senate – Head of Auditing Board) and Mr. Branislav Radulović, PhD (member of Senate – member of Auditing Board), has expressed unqualified opinion with an emphasis of matter on Annual financial statement and qualified opinion on regularity audit.

The financial audit has established that Annual financial statement of New Serb Democracy for 2014 was, in all material aspects, prepared and presented on a fair and objective manner in line with approved financial reporting framework except in a part of Report on basis of which relevant Auditing Board has expressed unqualified opinion with an emphasis of matter: “Accounting records of all business transactions must be based on valid bookkeeping documentation (agreed, signed and approved) in line with Article 4 of the Law on accounting and audit” and “With a view of higher quality of reporting and precise data, it is necessary to ensure separation of transactions related to regular operations and election campaigns in business books and to perform keeping records of expenditures in a manner that all expenditures of same types are expressed and presented in one account”.

The regularity audit has established that audited entity harmonized financial and other activities, in all material aspects with legal and other regulations identified as criteria for a given audit except in a part of the Report, on basis of which the relevant Auditing Board has given qualified opinion.

With regard to this, the relevant Auditing Board has given following recommendations:

  • Audited entity should withhold and pay tax on personal earnings pursuant to Law on personal income tax at the moment of payment allowances to physical persons;
  • Audited entity should record procurement of fixed assets in the General Ledger within a framework (account 0) and make the list and calculate amortization of the same ones;
  • Audited entity should keep record of all receivables on basis of signed and approved documentation;
  • Audited entity should execute keeping record and payment of all expenditures based on adequate and complete documentation;
  • Audited entity should ensure keeping record of the expenditures in a manner that the same types of expenditures are expressed at one account regardless of the manner of payment (cash or giro account);
  • Audited entity should engage employees for the working posts of the Secretary and adviser in deputy clubs of NOVA as well as Public relation adviser of the Party by the Agreement on employment, but not by temporary service contracts.

The audit of Annual Financial Statement of New Serb Democracy for 2013 found out a certain number of irregularities and rendered ten recommendations to the audited entity. The audit of Annual Financial Statement of New Serb Democracy for 2014 has established that the audited entity has realized eight from ten audit recommendations and two partly implemented. The partly implemented audit recommendations refer to documenting expenditures and keeping records of receivables.

The Final Audit Report on Annual Financial Statement of New Serb Democracy for 2014 has been officially published at the web site of the State audit institution.

Excerpt from the Audit Report on Annual Financial Statement of New Serb Democracy for 2014

Audit Report on Annual Financial Statement of New Serb Democracy for 2014 (mne)