The Polish Sejm passed legislation requiring funds managed by Bank Gospodarstwa Krajowego (BGK) to deposit surplus funds with the Ministry of Finance.
BGK Funds to be Deposited with Finance Ministry
The Sejm approved a bill mandating that surplus funds held by BGK-managed funds be deposited with the Minister of Finance. The new regulations also address managerial control, internal audit, and the state exam for auditors.
The amendment to the Public Finance Act received 356 votes in favor, 62 abstentions, and 19 against, and will now proceed to the Senate.
Impact on State Debt and Budget
The law stipulates that BGK funds should deposit public funds with the Minister of Finance. The Ministry of Finance states this will reduce the state budget’s borrowing needs and limit the growth of debt within the public and local government sectors related to fund activities. Deposits will be based on agreements with the Minister of Finance, with short-term interest rates specified.
Strengthened Control and Audit Procedures
The Ministry of Finance proposed changes to managerial control and internal audit, including defining control levels within the public finance sector based on a three-lines model. The changes also aim to expand the objectives of managerial control to prevent financial irregularities, conflicts of interest, and enhance detection and countermeasures.
The process for planning within managerial control will be streamlined, allowing for adjustments to annual plans. The scope of information aggregated for planning and reporting will also be clarified.
Reporting and Audit Thresholds Increased
The law requires ministers and heads of public finance sector units to submit statements on the state of managerial control to the Minister of Finance. The threshold for mandatory internal audits will be raised from 40 million zł to 67 million zł, and the limit for outsourcing internal audits will increase to 168 million zł.
Expanded Audit Scope
The amendment expands the list of public finance sector entities required to conduct internal audits upon exceeding the threshold to include the State Fund for Rehabilitation of Persons with Disabilities and other state legal entities as defined in the Public Finance Act.
Enhanced EU Funds Audit Access
Regarding EU funds audits, the Ministry of Finance proposes allowing the Director of the National Tax Administration Chamber to directly request information from the register of excluded entities.
Currently, information from the register is obtained through the Head of the National Tax Administration, then forwarded to individual chambers. The proposed change will grant directors direct access to the system, enabling faster data retrieval and streamlining administration.
Changes to Internal Auditor Exam
The law also includes changes to the state exam for internal auditors.