changes in the acquis since the previous year. The conditions are supported by detailed guides and questionnaires, specific to each subject area, used to measure administrative capacity in ministries, government agencies, and other public sector institutions.

The questionnaires are completed with officials in the relevant government institutions and form the basis for the second part of the assessments: intensive information gathering missions carried out by SIGMA staff in preparing the assessment reports. The third part occurs after the reports have been drafted, when they are submitted to the countries concerned for factual verification. The reports are then reviewed and calibrated by SIGMA staff to ensure consistency across countries and subject areas. The final reports are sent to the European Commission for use in preparing their annual reports and often inform decisions on pre-accession financial support and technical assistance provided by the Commission to support capacity building.

Peer reviews of supreme audit institutions

Peer reviews of supreme audit institutions began in 1998 when SIGMA was becoming increasingly involved in efforts by Central and Eastern European supreme audit institutions to develop their activities in line with good European audit practices. The first reviews-for Slovenia (1998), Latvia (1998-99), and Estonia (1999)-were conducted by SIGMA staff and expert practitioners from EU member states (usually in a team of three peers) and covered all aspects of each audit institutions functions. Since 1999 seven more peer reviews have been conducted.

A peer review provides an independent assessment of the issues that a supreme audit institution needs to address to become more effective, prepare for EU accession, and adapt to EU auditing standards and good practices. The emphasis is on providing practical recommendations for change and on helping the institution and other interested parties understand the need for institutional development in the context of negotiating EU accession.

A supreme audit institution must take the initiative to request a peer review, which has seven phases:

Determining the reviews organization and stages.

Forming the review team.

Preparing the review.

Arranging for two one-week fact-finding missions.

Writing the report and engaging in consultations.

Finalizing the report.

Identifying next steps.

Annexes to the peer review guidelines explain how information should be collected (mainly through interviews and file examinations) and the technical analysis to be carried out. Questionnaires have been developed- foe example, on parliamentary audit committees-to help obtain all necessary information. The SIGMA project manager is responsible for ensuring high-quality work, editing the final report, and preparing a summary that accompanies the report.

The intended results include endorsement of peer review recommendations by the supreme audit institution and agreement on further steps such as revising the audit law, establishing a strategic development and action plan, identifying requirements for further technical assistance, and introducing specific benchmarks and standards.

Peer reviews of public internal financial control systems

All EU candidate countries must develop comprehensive, reliable systems for public internal financial control. Legislative frameworks have to be implemented, together with secondary legislation providing for the implementation of new internal control capabilities that ensure the functional independence of internal auditors. These efforts are essential for strengthening internal financial capacity prior to receiving pre-accession financial support and for receiving EC structural support after accession. Against this background, SIGMA conducts peer reviews of public expenditure and financial accountability systems in candidate countries.

These reviews provide practical suggestions to help candidate countries establish adequate systems for public expenditure management and control as well as for public internal audit. The reviews conduct independent assessments of existing systems, report the findings, and make focused, practical recommendations for change.

This type of peer review is requested by the candidate countrys ministry of finance, often at the suggestion of the European Commission and SIGMA. The review team is composed of expert practitioners from EU member states. The process is similar to that used for peer reviews of supreme audit institutions and includes two one-week information gather-

ing missions and preparation of a detailed report submitted to the ministry of finance for consideration. The report is also reviewed within SIGMA and benchmarked against successful SIGMA reviews for other candidate countries. The final stage is the presentation of the reports key findings and recommendations to the relevant authorities in the country concerned and to the European Commission.

The intended results are endorsement of the peer reviews recommendations by the ministry of finance and the Commission and, after appropriate consultations, agreement on next steps for the ministry-such as pursuing changes to relevant laws and regulations, issuing a paper on the strategic development of relevant agencies and organizational structures, and identifying further technical assistance needs.

UNDP CONTACT GUIDELINES

The United Nations Development Programme (UNDP) developed the Country Assessment in Accountability and Transparency (CONTACT) to provide the international development community with a comprehensive tool for assessing national systems for financial management, accountability, and financial integrity. Guidelines setting out the approach and methodology were issued in 2001 (UNDP 2001).

CONTACT is a comprehensive set of generic guidelines that help:

Governments conduct self-assessments of the strengths, weaknesses, needs, and priorities of their financial accountability and integrity systems.

Consultants hired by bilateral and multilateral development agencies to assess these systems. Consultant work is intended to support governments (at their request) in their self-assessments and to review the feasibility of cooperation with governments (for example, through a brief mission to identify strengths and weaknesses of public expenditure management prior to a full-scale programming mission by the UNDP, World Bank, or another agency).

CONTACT provides stakeholders with a tool to support quality control, measure performance, and offer recommendations at desired stages of the accountability cycle. It is a dynamic, continuously evolving instrument that requires regular updates based on best practices and pilot tests. Pilot