At its 16th regular session held on November 4, 2025, the National Assembly of the Republic of Srpska adopted the Annual Audit Report for 2025 and took note of the Report on the Financial Audit of the Consolidated Annual Financial Report for Budget Users of the Republic of Srpska for the period from January 1 to December 31, 2024.
Supreme Audit Office of the Republic of Srpska submitted to the National Assembly of the Republic of Srpska, alongside the audit report on the Consolidated Annual Financial Report for Budget Users of the Republic of Srpska, the Annual Audit Report for 2025, which includes the most important findings and recommendations from the financial audit and performance audit for the past reporting period, from August 1, 2024 to July 31, 2025.
In accordance with the audit activity plans for 2024 and 2025, a total of 90 financial audits were carried out in the specified reporting period, which include the audit of financial statements and, together with it, the audit of compliance.
These are audits:
- 21 beneficiaries of the budget of the Republic for whom, according to the law, a financial audit is mandatory every year,
- 4 social protection funds,
- Consolidated annual financial report for the beneficiaries of the revenue of the budget of the Republic of Srpska for the year 2024,
- 24 local self-government units (of which 12 were conducted in the period 1.8 – 31.12.2024 (for 2023) and 12 audits by 31.7.2025 (for 2024);
- 22 institutions (in higher education field, healthcare, etc.);
- 15 business entities (public enterprises, joint-stock companies and limited liability companies),
- three other entities (republic administration, an agency, a secretariat).
Based on the conducted financial audits for the aforementioned entities, the following opinions were given:
- Opinion on Financial Statements:
- unqualified opinion for 34 entities;
- qualified opinion for 54 reports;
- one adverse opinion and
- one disclaimer of opinion
- Opinion on Compliance:
- unqualified for 38 entities;
- qualified for 50 entities and
- two adverse opinions.
Of the 21 entities subject to mandatory annual financial audit, unqualified opinion (for both financial statements and compliance) was issued for 16 of them. For the remaining entities, qualified opinions were issued: one ministry received a qualified opinion for both financial statements and compliance; for one ministry and the General Secretariat of the Government, a qualified opinion was issued for the financial statements (alongside a unqualified opinion on compliance); and for two ministries, a qualified opinion was issued on compliance.
Implementation of recommendations from the financial audit report for the previous year
Within the financial audit reports issued in this reporting period, the Supreme Audit Office made a total of 867 recommendations or an average of 9.63 recommendations per audit report (which is at the level of the previous year), of which 451 related to the elimination of irregularities and errors observed in the financial reports and 416 related to the elimination of non-compliance with regulations. In this reporting period, of the 867 financial audit recommendations issued, some relate to the audited period of 2023 (534 recommendations), and some to 2024 (333 recommendations).
Although almost a third of the financial audit reports in this audit cycle refer to entities subject to mandatory audit (budget users and funds defined by the Law), the smallest number of recommendations (an average of two per report) were addressed to these entities, with the highest percentage of unqualified audit opinions (over 86%).
On the other hand, the largest number of recommendations given, more precisely 371 or almost 43% of all recommendations in this reporting period were addressed to local self-government units (through 24 financial audit reports, including 12 audits in the period from 01.08. to 31.12.2024. and 12 that were conducted in 2025). The complexity of the financial audit of local self-government units (consolidated FR that includes lower budget users; conducting audits every 3-4 years) is clearly reflected in the scope of identified deficiencies, but also in the number and structure of recommendations. An average of 15.45 recommendations per local self-government units report indicates that it is necessary to strengthen and improve the system of financial reporting and internal financial control in municipalities/cities, as well as the mechanisms and modalities of parliamentary oversight.
According to data from the publicly available register of audit recommendations, the status of all verified financial audit recommendations is as follows:
- 55% are fully implemented,
- 17% are partially implemented,
- 26% have not been implemented, while
- 2% are no longer relevant due to changed circumstances for their implementation.
Performance Audit
By choosing the areas of audit and topics that are the subject of performance audits, the Supreme Audit Office is in the function of achieving the general goals established by the strategies and policies of the Republic of Srpska and in the function of improving general and financial management in the public sector of the Republic of Srpska. In order to meet the general objective of the performance audit, it includes several public sector institutions (PSI) through the audit process that have certain roles, competencies and responsibilities related to the processes and activities that are the subject of the audit over a longer period.
During the specified reporting period, six performance audits planned in the Annual Audit Plan for 2024, were conducted. All performance audit reports were published in accordance with the plan in the period from 30.8. to 31.12.2024. and in addition, three follow-up reviews of the implementation of recommendations from the performance audit report were conducted.
The performance audit reports published during the reporting period covered the following socially relevant topics:
- Functioning of the forest fire protection system
- Management of building maintenance
- Protection of immovable cultural heritage
- Functioning of social protection system for the elderly
- Management of grants in local self-government units
- Setting prices for utility services.
In order to harmonize the results of the performance audit, six focus groups were held, where the audit findings were presented to representatives from 60 public sector institutions covered by the performance audits.
Through six performance audit reports, the Supreme Audit Office addressed a total of 50 recommendations to the Government of the Republika Srpska, ministries, public enterprises, public institutions, local governments and other public sector institutions that are competent and responsible for managing the processes and activities that were the subject of the performance audit.
The comments submitted by the institutions covered by the audit were considered with due attention, and the justified and documented comments were accepted and included in the final audit reports. An overview of the number of institutions covered by the audit and the number of institutions that submitted comments, as well as the scope, nature and substance of the comments, indicates a high level of consistency of findings, conclusions and recommendations between the Supreme Audit Office and the institutions covered by the audit.
Implementation of performance audit recommendations
In the reporting period, the Supreme Audit Office conducted three engagements – follow-up reviews of the implementation of performance audit recommendations. These are audit engagements carried out to determine whether measures and activities have been taken by the audited institutions regarding the implementation of recommendations from individual performance audit reports.In accordance with the annual audit plans, in the previous period, including this audit cycle, 23 follow-up reviews were conducted and 156 previously given performance audit recommendations were reviewed, and the results of the review were:
- Fully implemented 17%
- Partially implemented 44%
- Implementation in progress 17%
- Not implemented 22%.
In the reporting period, several activities related to performance audit were carried out with the participation of representatives from the Supreme Audit Office, highlighting the significance of this type of audit:
- Participation in the International Conference “For More Transparent, Equitable, and Efficient Budgets – Comparing Local and International Experiences and Challenges in Gender Equality Auditing” and presentation of the results of the performance audit “Measures and Activities for Gender Equality of Institutions of the Republic of Srpska”, organized by the State Audit Institution of Serbia and UN Women, Belgrade, May 2025.
- Participation in the Forum on Gender-Responsive Budgeting and presentation of the results of the performance audit “Measures and Activities for Gender Equality of Institutions of the Republic of Srpska”, organized by UN Women, Sarajevo, April 2025.
- Presentation of the results of the performance audit “Management of Grants in Local Self-Government Units” to the Committee for Finance and Public Property of the Association of Municipalities and Cities of the Republic of Srpska, Prnjavor, February 2025.
- Presentation of the results of the performance audit “Prevention of Peer Violence in the Republic of Srpska” at a thematic session of the Audit Committee of the National Assembly of the Republic of Srpska, Banja Luka, December 2024.
- Participation in the conference “Peer Violence – Examples of Good Practices” and presentation of the results of the audit “Prevention of Peer Violence in the Republic of Srpska”, organized by the Children’s Ombudsman of the Republic of Srpska, Banja Luka, November 2024.
- Participation in the panel “Enhancing the Efficiency of Audit Committees” within the Conference “Strengthening Corporate Governance – Sustainability Reporting and the Growing Role of Audit Committees” organized by the World Bank’s Center for Financial Reporting Reform and the Association of Accountants and Auditors of the Republic of Srpska, Banja Luka, September 2024.
