Serbia’s State Audit Institution (DRI) has confirmed that it has not issued a financial-statement or compliance audit report on the National Bank of Serbia (NBS) since 2018, following unsuccessful attempts to examine the central bank’s expenditure and procurement activities.
The DRI said it initiated reviews of the NBS’s financial activities for 2018 and 2019, but encountered objections over its authority to conduct the audits and difficulties obtaining the documentation needed to complete them. The disclosure has renewed attention on the relationship between central-bank independence, public financial accountability and external oversight, particularly in relation to procurement and the use of institutional funds.
Earlier Audit Proceedings Remained Incomplete
The DRI launched audit proceedings covering the central bank’s activities in 2019 and 2020. The NBS challenged the auditor’s jurisdiction and submitted formal objections to the decisions initiating the reviews. The DRI Council examined and rejected those objections.
The attempted compliance audit for 2018 included salaries, employee compensation, other personnel expenditure and public procurement. The DRI said the requested documentation was not provided, preventing it from determining whether the activities complied with applicable regulations.
The examination of the NBS’s 2019 activities also failed to reach the required scope or meet the relevant auditing standards. The absence of a completed audit opinion does not establish that the central bank’s expenditure was improper. It means that the DRI was unable to provide the assurance sought through those reviews.
Legislative Amendment Changed the Audit Framework
A change to Serbia’s Budget System Law in December 2020 altered the institutional framework. Under the amendment, published in Official Gazette No. 149/2020, the NBS ceased to be classified as a user of public funds for the purposes of the legislation.
The DRI subsequently removed the central bank from its annual audit programmes and confirmed that it has not included the NBS in its audit planning since the legislative change.
Central-bank independence is intended to protect monetary policy, financial stability management and banking supervision from inappropriate political interference. It does not, however, remove the need for financial accountability, transparent procurement or independent examination of institutional expenditure. The legislative framework therefore raises questions about the scope of external scrutiny applicable to the central bank and the mechanisms available to verify its spending.
Financial Statements Continue to Undergo External Audit
The absence of DRI reports does not mean that the NBS has had no external financial auditing. Its 2025 financial statements, accompanied by an authorised auditor’s report, were submitted to the National Assembly.
The central bank also submits annual reports and financial plans through the parliamentary reporting framework. A financial-statement audit and a state compliance audit serve different purposes. The former assesses whether financial statements provide a materially reliable picture under applicable accounting standards. A compliance audit examines whether particular activities, including procurement and personnel expenditure, meet legal and regulatory requirements.
The lack of completed DRI reviews therefore concerns a specific form of public-sector oversight rather than indicating a complete absence of financial auditing or reporting.
Procurement Practices Renew Attention on Oversight
The issue returned to public discussion following scrutiny of the NBS’s software procurement and the role of the state auditor. A former central-bank governor and economics professor took part in a discussion on institutional reform and public-spending controls, prompting the DRI to clarify the history and outcome of its previous audit attempts.
The DRI said it had been unable to complete the earlier examinations and that subsequent legislative changes prevented the central bank from being included in its regular audit programme.
Its statement did not establish any specific procurement irregularity or unlawful expenditure. Nevertheless, the case has brought attention to oversight of tender procedures, software and technology purchases, contract amendments, supplier selection and supporting financial documentation. These issues are relevant to the procurement of complex technology and financial infrastructure by central banks, where both technical and financial scrutiny can be important.
Central Bank Governance and Financial-Sector Confidence
The NBS is responsible for monetary policy, currency stability, financial-sector supervision and critical payment-system functions. Its institutional credibility is therefore closely connected to confidence in Serbia’s financial system.
For investors and financial institutions, the relevant governance question is whether the country’s framework combines central-bank independence with transparent reporting, credible external auditing and effective parliamentary oversight.
The DRI’s disclosure also provides grounds for examining how responsibilities are divided between financial-statement audits, procurement compliance reviews, internal auditing, parliamentary reporting and oversight of the central bank’s institutional governance. Any changes to the framework would need to preserve the NBS’s operational independence while ensuring that its expenditure and procurement activities remain subject to effective scrutiny.
