Impact of Public Internal Financial Control on Public Administration in Croatia

The PIFC /Public Internal Financial Control/ was developed by the European Commission. PIFC is set of principles internal financial controls system established for the purpose of controlling, auditing, supervise of the use of national budget and European Union budget and funds. Also, in order to support candidate countries in their internal control system reforms in the public sector. Therefore, it is expected for the candidate countries to establish and develop the system of internal financial controls according to the concept which was in that field developed by the European Union based on International Standards and the best practice of European countries. Since the year 2003 the Republic of Croatia undertakes intensive activities on the establishment and development of the internal financial control system according with the regulation of European Union. In keeping with the set concept, the Republic of Croatia undertook numerous activities during the past six years to create all the necessary assumptions for the establishment and development of the system, including: the adoption of the initial strategic documents; drafting of laws; the creation of organizational capacities and human resources; and the implementation of the system with budget users at central government and local levels. In this paper, phases of implementation PIFC in Croatian Public Sector will be presented. Through these phases we will show impact that PIFC has on development of New Public Management in Croatia and changes in organizational structure and human resource that are caused during this process. Also, we will give critical opinion of that process and problems which occur during implementation. Finally, we will present approach in implementation of PIFC in Slovenia and Bosnia and Herzegovina.