Developments of Public Internal Financial and Control Systems in Albania

This paper is based on Albania's inspiration for its membership in the European Union, by putting in place effective PIFC systems in public entities.

The Public Internal Financial Control (PIFC) was developed by the European Commission as a structured model for guiding national governments in establishing a state-of-the-art control environment in their income and spending units. This framework it aims to give reasonable assurance that transactions comply with the principles of a sound financial management, transparency, efficiency, effectiveness and economy, as well as with relevant legislation and budget guidelines1. One of theconditions for all candidate countries that aim to enter European Union is to have in place effective internal control systems in the public sector. Therefore, it is expected that the candidate countries should establish and develop these systems according to the concept developed by the European Union, based on international standards and the best practice of European countries. In this context since the year 2008 the Republic of Albania has undertaken intensive activities on the establishment and development of the internal financial control system in the public sector in accordance with the provided framework. This paper presents the steps Albanian government has taken in implementing PIFC in the public sector. In addition, the impact that PIFC implementation has on the development of the public management, the status of these systems and the planned reforms in the future period are discussed. In the end closing opinions are provided as well as recommendations for further improvements in the PIFC systems.