261. Comparative audit of investment management at 15 Hessian corporations

The audit is based on the Law on the Regulation of Inter-municipal Audits of Municipal Corporations in Hesse (ÜPKKG). The contractor will make findings on budgetary stability, examine the formal processing of annual financial statements, investigate the corporations' risk prevention to avoid fraudulent acts, and conduct follow-up reviews. Details can be found in the information sheet. The contractor will also audit the economic activities of the municipalities and thus the management and control of those autonomous organizational units to which the corporations have transferred municipal tasks. Audit aspect Legality: Compliance with the provisions of the Hessian Municipal Code (§§ 121 ff. HGO) for the activities of the corporations (Part Six, Chapter Three of the HGO): - Permissibility of activity - Surplus for the municipal budget from economic enterprises (including savings bank distributions) - Participation requirements - Granting and exercising of information and audit rights (§ 123 HGO in conjunction with §§ 53 and 54 HGrG) - Participation report and disclosure - Disposal of participations - Representation of the corporations in companies and other associations - Notification obligations towards the supervisory authority - Abuse of economic power Compliance with further provisions of the HGO, such as the involvement of the municipal council, particularly with - the acquisition, expansion, and disposal of participations (§ 51 No. 11 HGO), - the change of legal form of municipal enterprises or economic enterprises in which the municipality has a stake (§ 51 No. 12 HGO), as well as - the assumption of guarantees, the conclusion of warranty agreements, and the provision of other securities for participations (§ 51 No. 15 HGO). Compliance with further provisions, particularly in the areas of - municipal budget law (including consolidated financial statements according to § 112a HGO) and - procurement law (specifically regarding in-house transactions) Establishment of a joint compliance system based on - Participation guideline / (Public) Corporate Governance Code - Comprehensive internal control system and implementation in standard processes Audit aspect: Appropriateness Establishment of an investment management system that adequately controls and manages participations, particularly with regard to - accounting for participations (e.g., balance sheet and valuation of fixed assets and provisions, taking into account generally accepted accounting principles) - financial management of participations (e.g., liquidity, loans, interest, derivatives, receivables, guarantees) - number, appointment, and remuneration of the management and supervisory bodies of the participations - adequate equipment of the participations (e.g., office buildings, vehicles) Ensuring adequate information and reporting as an interface between participations and the administrative leadership (mayor) through investment management Preparation and follow-up of meetings of the supervisory bodies of the participations by the investment management to enable the representatives of the corporations to effectively exercise their management and control tasks Use of artificial intelligence or investment software Audit aspect: Efficiency Fulfillment of tasks by autonomous organizational units compared to the fulfillment of tasks by the corporations themselves Contribution/cost of participation for the municipal budget (distribution, additional contributions, outsourced debt) Appropriateness of staffing of the investment management in relation to general administration Findings and suggestions for deregulation The audit is based on previous operational audits. Details and further audit content can be found in the offer and the information sheet. Audit subject: 15 cities and municipalities, comparatively...