Public Internal Audit in Transition: Romanian Higher Education in a European Governance Perspective

Romania’s accession to the European Union led to significant reforms in terms of public financial management, which ultimately included the development of a contemporary public internal audit system as stipulated by the European Public Internal Financial Control (PIFC) framework. In its 1999 Regular Report, the European Commission recognized that the institutions lacked effective internal financial control mechanisms and suggested developing independent audit structures in the public sector. This article explores the history of public internal audit in Romanian higher education institutions and seeks to explore both what the accession requirements of the European Union demanded and how these became institutionalized within national legislation as well as in university-level policies. Based on an analysis of progress reports from Europe, SIGMA and national legislative acts governing public internal audit, as well as directives and ministerial regulations that dictate how best to implement them at the educational establishments level in this context, this study is based on an investigation of the study. Findings reveal that internal audit units in universities were formed from 2003 onwards and initially faced serious difficulty because of the lack of personnel with specialized expertise, adequate methodological support, overlapping control functions, and limits due to university independence. By and large with help from the Central Harmonization Unit for Public Internal Audit (UCAAPI), and in line with international methods of auditing, internal audit progressed in a more risk-based and performance-oriented approach, advising on compliance and reporting purposes. The paper adds to the literature by explicitly connecting the emergence of internal audit within Romanian universities in the EU accession governance agenda, and by detailing sector-specific forms of institutionalization. It indicates that public internal audit has emerged as a critical governance mechanism contributing to transparency, accountability and efficient management of public funds in higher education.