FOR CONTROL OVER EXECUTION OF THE REPUBLICAN BUDGET
Mass media about the Accounts Committee
Preliminary assessment of the draft national budget in the Republic of Kazakhstan, ECOSAI Circular (Spring issue)
Preliminary assessment of the draft national budget in the Republic of Kazakhstan
In accordance with the Law of the Republic of Kazakhstan «On State Audit and Financial Control» adopted on 12th November 2015 the Accounts Committee for Control over Execution of the Republican Budget of the Republic of Kazakhstan (hereinafter – the Accounts Committee) starting from 2017 was empowered with a new function to conduct preliminary assessment of the draft national budget with a view to basic directions of its expenses.
Peculiarity of the preliminary audit (control) is its preventive nature aimed at defining reasonability, practicability and reliability of the planned indicators and reducing the risk of possible financial violations in the future.
General recommendations on conduction of such audit are included in the Lima Declaration of Guidelines on Auditing Precepts. However conduction of the preliminary audit (control) depends on legislation, conditions and requirements to audit (control) bodies in each country. The given precepts reflect consensus of SAIs of different countries regarding best practices.
Preliminary audit is stipulated as well in the International Standards of Supreme Audit Institutions (ISSAI) according to which the SAI can participate either in audit (control) activities or activities directed to the improvement of public management and particularly in assessment of the draft budget in case of Parliament’s request to the SAI. This kind of activity should be of high quality and be valuable for decision-makers.
In order to make qualitative assessment of the draft budget SAIs’ experience and ISSAI were studied. In addition special attention was paid to peculiarities of the budget legislation of the Republic of Kazakhstan and adherence to independence of the Accounts Committee from any political influence to provide bias-free approach to execution of its audit functions.
For implementing the new function on assessment of the draft budget the Rules on conducting assessment of the draft national budget with a view to basic directions of its expenses were approved by the Decree of the President of the Republic of Kazakhstan in December 2016.
For the highest reduction of possible violations in the future and enhancement of financial discipline preliminary audit (control) after budget development by the authorized public bodies will be conducted by the Accounts Committee with a view to legitimacy of budget formation, compliance with budget system principles and achievement of set goals and tasks of the result-oriented budget.
Preliminary audit aims at detection of existing problems in budget execution, enhancement of efficiency in implementation of strategic and program documents, including state and sectorial programs.
According to the Rules on conducting assessment of the draft budget central authorized body on budget planning (Ministry of National Economy) submits draft law on national budget for consideration of the Government of the Republic of Kazakhstan and the Accounts Committee no later than 15 August of the current financial year.
It is necessary to note that until receipt of the final draft budget the Accounts Committee has access to information on all stages of draft budget formation process.
The Ministry of National Economy submits estimation of state social and economic development to budget program administrators and the Accounts Committee simultaneously. In addition, the Accounts Committee is provided with the information on expenses limits of the budget programs administrators and limits for new initiatives.
While discussing the budget of the budget programs administrators at the Republican Budget Commission the Accounts Committee participates as an observer (without voting rights) being provided with all materials of the Budget Commission on issues of draft budget planning.
According to the Rules on conducting assessment of the draft budget while conducting the assessment the Accounts Committee will pay special attention to interconnection of indicators of public bodies strategic plans with indicators of economic and budget planning. Moreover planned results achievement should comply with provisions of the Addresses of the President of the Republic of Kazakhstan and documents of the System of state planning.
Adherence to continuous implementation of medium- and long-term investment projects is one of the most important elements of the draft budget assessment. Therefore analysis and assessment of these projects for past periods of reporting financial years will be conducted. Herewith in all cases results of audit and financial control held by the public audit and financial control bodies at the past reporting financial periods will be taken into consideration.
Results of assessments of implementing the state and government programs by the budget programs administrators which were made by the authorized bodies will be taken into account as well.
At the end expenses of the draft budget will be evaluated for compliance with priorities of social and economic development of the country and prioritized directions of republican budget expenses.
The Accounts Committee submits the conclusion on assessment of the draft budget to the Government and Parliament of the Republic of Kazakhstan no later than 1st September of the current financial year.
The Accounts Committee participates in discussion over the draft budget while its consideration in the Parliament of the Republic of Kazakhstan.
Member of the Accounts Committee
for Control over Execution of the
Republican Budget of
the Republic of Kazakhstan