INFLUENCE OF SUBJECTIVISM ON THE EFFECTIVENESS OF STATE FINANCIAL CONTROL IN THE AREA OF BUDGET ALLOCATION

Abstract

The purpose of the article is to study the impact of subjects of state financial control, primarily internal, over the budget on all levels of executive power, in order to eliminate subjectivity in their actions and increase the efficiency of public finances in general. Method. The study, which requires a deeper consideration of the issue of transformation of the content of the role performed by subjects of state financial control, primarily internal, in the presence of crisis phenomena in the economy. Methodology. The study of this issue is based on the analysis of the performance of the State Audit Service of Ukraine in identifying violations that led to losses of financial and material resources for the period of 2011–2017. Results. In our opinion, the dynamics of a constant decrease in the size of eliminated financial violations testifies to the insignificant effectiveness of the implemented control measures. The lowest, according to statistical indicators, is an indicator of elimination of financial violations in recent years, as well, the number of financial audits has also decreased significantly. Moreover, the number of inspections in individual cases had no effect on the final result. At the same time, the transition to new standards of inspections, with a view to deregulating and reducing the level of subjectivism, is less effective, but more transparent, which is positive in a slowdown of the economy, despite a certain reduction, but there is a significant level of corruption. Subjectivity in the actions of the controlling bodies can exert significant pressure on the entities subject to their supervision. Therefore, in order to achieve an optimal balance between the effectiveness of control measures and the reduction of pressure on economic entities, it is necessary to bring the existing system to standards that correspond to the level of developed countries. Currently, the process of changing approaches to inspections is based on the selection of objects that are subject to inspections based on a prior assessment of risks. Practical implications. The domestic system of internal state financial control is characterized by a significant level of subjectivism. It is substantiated that the reorganization of the system of internal state financial control is directly related to the reorganization of the entire system of public finances, in particular, one of its most important components – the system of state purchases.