Public Internal Financial Control. Evidence from Albania

Abstract

Public Internal Financial Control (PIFC) was developed in the late 90s as means for Eastern Bloc countries working toward full membership in the European Union (EU) to implement the necessary control systems to safeguard public resources. PIFC is an integral part of the National Strategy for Development and Integration (NSDI). This document, produced in March 2008, replaced the National Strategy for Social and Economic Development and set priorities and medium to long-term targets, strategic objectives for Albania and also includes a set of operating principles to ensure that government policies, planning and their implementation will be carried out in an integrated manner. The aim of this paper is first to list the reasons for implementing a different system and the importance of changing the system to Financial Management and Audit for Albania, and second, to examine, through a comparative analysis, the effectiveness of the implementation of the new system of financial management and control in the public sector comparing the two systems. By giving an opinion on each component of the system, this paper aims at analyzing, in a critical way, elements of the different perspectives of the two systems, their advantages and disadvantages.