Public Financial Control Research Articles

Public Financial Control – Financial Policy Instrument of the State

Abstract The main objective of this paper is to provide an objective approach, starting from the current legislation, on the financial control system and the extent to which it can be an instrument of financial policy. At the same time, this paper captures the structure of the financial control system in Romania with brief considerations of the forms of financial control that make it up, starting from the community acquis in the field of financial control. In the current economic-social context, the existence of financial control standards is required, which are guaranteed by the Romanian state through the creation of a set of laws that govern this field. The pragmatic approach to financial control is vital for establishing its objective, based on specific management methods and techniques, and with the help of which the consolidation of order, discipline, the spirit of responsibility, as well as the efficient management of the economic and financial resources managed by the entities can be achieved public. Financial control must ensure the good functioning of all activities in the economic sphere and is called to act systematically in order to identify or prevent possible deviations and deficiencies, increase the efficiency in the use of resources, preserve the integrity of the heritage and, last but not least, in understanding the way in which legality is respected in the economic and financial field.

Formation and Positioning of New Legal Institutions in Financial Law: а Study on Their Characteristics

This article examines the formation and positioning of new and already-established financial and legal institutions. Emphasis is placed on the importance of establishing common financial and legal institutions. The article argues that there is currently an active process of shaping common financial and legal institutions, as exemplified by the emergence of the “emission law” and “offset and refund of fiscal payments” institutions. The institution of offset and refund of fiscal payments is modeled after the institution of “public financial control” and includes a complex set of financial and legal rules governing various types of financial relationships, unified by overarching characteristics. Furthermore, this article posits that the financial and legal institution of mandatory audits, which has gained prominence in the field of financial law in the 21st century, should be categorized not within the general but within the specialized field of financial law. It is argued that the formation of financial law institutions within the general framework follows the same pattern as the institution of “public financial control”.

Enhancement of Performance Audit for Effective Budget Investments

The relevance of the study is due to the need to improve the efficiency of budget investments in the Republic of Kazakhstan. Performance audits of the use of these investments will reveal opportunities to optimize expenditures and increase the overall socio-economic impact, which is significant for the sustainable development of the country. In order to improve the efficiency and socio-economic return of budget expenditures, this study is focused on evaluating the efficiency of budget investments during the performance audit. This study is aimed at reviewing the role and capabilities of the performance audit, as a mechanism of public financial control of budget investments. Data Envelopment Analysis (DEA) is used as a method for evaluating efficiency. Taking into account the reference management, the DEA algorithm is proposed to address the issue of limited input and output data to evaluate the national socio-economic development indicators. The special study of the budget investments’ technical performance in the regions of Kazakhstan shows that this method can be used since it improves the flexibility and performance of evaluation in the performance audit. The stability of the concept of performance audit is therefore confirmed, showing the need for a periodic revision of the legislative and methodological base. The study highlighted the main challenges of performance audit of budget investments in the Republic of Kazakhstan and provided recommendations for improvement.

Foreign Experience in Digitalization of Preventive Public Financial Control (on the Example of USA, China, Canada, India and Australia)

The article discusses the issues of implementing preventive financial control using modern digital technologies. The up-to-date level of informatization of the government agencies activity and local governments allows moving to a qualitatively new level of interaction between regulatory authorities and the environment under control. In this case the verification and analysis of reporting is performed not only after the fact of fulfillment but also in a preventative manner. This allows a quick respond to emerging risk situations, prevention of erroneous actions, and management decisions in a real time. When solving the problem of digitalization of state financial control procedures, the emphasis and priorities can be placed differently, both in the selection of automated processes and in the selection of technological solutions. The experience of other countries represents a valuable source of knowledge in this area. Therefore, the aim of the article is to study the best practices in digitalization of state financial control and to develop the recommendations for implementing preventive digital state financial control in Russia. This article presents the analysis of the experience of the USA, China, Canada, India, and Australia. The main projects are considered that were implemented in these countries to improve the financial control by implementing digital solutions. The features and areas of application of cloud computing, technologies of data collection, processing and analyzing the Big Data, as well as systems based on artificial intelligence in the field of public financial control are presented. As a result, recommendations have been formulated for adapting the best practices of these countries for the implementation of preventive digital control in the financial and budgetary sphere in our country. A further elaborated investigation of organization of the collection and processing of data on the object under control, coming not only from its corporate sources and government information systems but also from publicly available Internet resources, is considered as a relevant issue.

Цифровой правовой контроль как новая цивилистическая категория

Introduction: the article looks at digitalization of economy through the prism of the ‘new technological path’, Digital Earth concept, digital innovation in the framework of Industry 4.0. The focus is on the advantages and disadvantages of such digitalization from the perspective of digital legal control. In the light of the formulated thesis about the absence of a unified scientific idea of the place of digital legal control in the system of relations under private or public law, the author attempts to develop the fundamentals of the digital legal control concept, which is presented in the article as a new civil category. Purpose: to form a general idea of digital civil‐law control, its place in the system of types of digital legal control, and the areas of its practical implementation. Methods: general scientific methods used in the study include analysis, synthesis, induction, deduction, abstraction, interpretation, comparison, etc.; special scientific methods comprise legal‐dogmatic, historical‐legal, comparative‐legal methods, interpretation of legal norms, and legal modeling. Results: digital legal control is a characteristic of both public‐ and private‐law relations. The article develops doctrinal definitions of ‘digital public‐law control’ and ‘digital private‐law control’. Conclusions: in the field of public law, digital legal control is most often associated with public digital financial control. Digital legal control inherent in a civil agreement executed via a smart contract is implemented with the use of mathematical algorithms, therefore such control can be carried out both by a person and without his direct participation; however, in both cases such control is predetermined by the technical framework of a specific information system. Classical contract law is based on trust of the property turnover participants in the state system of coercion, while digital contract law is characterized by trust of the parties to an agreement in the computer code.

Public budget control in Russia: to the problem statement

This article is devoted to the analysis of the Institute of public budget control in the Russian Federation. The paper explores various points of view in the scientific and educational literature regarding the legal nature and essence of public budget control in Russia. The authors have developed and justified the author's definition of public budget control, which should be understood as the activities of subjects of public control for the organization and conduct of public control measures in relation to the activities, acts and decisions of subjects of budgetary legal relations caused by the processes of drafting state and municipal budgets, budgets of extra-budgetary funds, their consideration and preparation of reports on their execution (in part the legality of the formation, distribution and use of these budgetary funds). The article analyzes the common features and differences between the institutions of public financial control, public tax control and public budget control. The article uses a number of scientific research methods: formal-logical; comparative-legal; historical-legal; statistical; sociological; financial analysis; method of analyzing specific legal situations. The authors analyze modern problems that hinder the optimal organization and implementation of public budget control measures in the Russian Federation, among which are: the lack of formalization of the concept of "public budget control" both in the Constitution of the country and in current legislation; the absence in the Russian scientific doctrine of public control of a unified approach to the definition of this concept, its content, objectives, tasks, specific forms, methods and types of measures; insufficient use in this area of positive foreign experience of civil society control over budgetary legal relations; weak organizational and technical base of subjects of public control; lack of real powers for these subjects to exercise public budget control. The article develops and substantiates a system of measures to resolve these problems.

Annual Reports of Municipalities in Terms of Accountability: Municipalities in Burdur

In Turkey, with the Public Financial Management and Control Law No. 5018, it was aimed to make the expenditure process in public administration fast and functional, and related arrangements were made in the budget principles in terms of accountability and transparency. Within the framework of accountability, an annual report is required to be prepared and announced to the public. Annual reports are also included in the Municipal Law No. 5393 and are shown as one of the control mechanisms of the municipalities. With the Regulation on Annual reports to be Prepared by Public Administrations, the report was requested to be published on the website of the relevant administration. It has been observed that the municipalities examined within the scope of the study have official websites. 
 Within the scope of this research, it has been researched the municipalities websites in Burdur province whether they publish their annual reports or not also whether they are up to date. Annual reports for 2020 and 2021 were searched on the websites of municipalities in the research. As the result of the research, most of the municipalities have not included annual reports on their websites, and some of the municipalities include are not up to date.

GLOBAL EXPERIENCE OF PUBLIC FINANCIAL CONTROL IN THE PUBLIC FINANCIAL MANAGEMENT SYSTEM

The relevance of this study lies in the fact that with the transition of the economy to a market model, state control over the legality and rationality of the use of public finance becomes increasingly important. State financial control is an important instrument of the financial mechanism and one of the main means of implementing state financial policy. Its role is to support the successful implementation of financial strategy and tactics, as well as the expedient and efficient formation, allocation and use of financial resources of the state. In the conditions of formation of a market economy, control over the budgetary process is becoming increasingly important due to the need to improve the efficiency ofpublic administration of the whole system offinancial relations. State financial control includes control over compliance with financial legislation, the process offormation and use of state, budgetary and extra-budgetary resources, as well as assessment of the economic efficiency offinancial operations and the targeted nature of public expenditure. This work covers important theoretical and methodological aspects of state financial control and aims to identify the main directions of its development abroad. The paper analyses foreign experience in three areas: general public finance control, parliamentary and government control as well as internal control and internal audit as special areas of financial control.

Functionality of the Three Lines of Defence Model in the Case of Public Financial Audit in the Republic of Moldova

Both, the alignment with the European vector of development, as well as the new challenges and demands made by the public to the public authorities determine the need to take over and adapt some effective mechanisms of public governance in the Republic of Moldova. Among them, the model of the Three Lines of Defence that forms the analytical framework for the integrated approach to internal public financial control and external public audit stands out. This article, applying specific research methods, first of all, the examination of national legislation and international practice, aims to achieve the specifics of the model of the Three Lines of Defence in the public institutions of the Republic of Moldova, identifying the most pronounced constraints and problems in its operation. In order for the monitoring of the activity of public institutions in the Republic of Moldova to be effective, it is necessary to develop and apply an integrated approach to internal control and public external audit.

Public control and supervision in the economy: theoretical and legal justification

In the context of the rapid processes of economy digitalization and integration, the issues of updating the forms and methods of public law impact on economic relations in the new modern conditions naturally arise. Taking into account the fact that control and supervision are traditionally positioned as basic management functions, the issues of substantiating public control and supervision in various areas of managerial influence in general and in the economic sphere in particular are becoming increasingly relevant. At the same time, the literature review allows to speak about the lack of common positions on the issues of structural and functional content of the category “public control and supervision in the economy”. In this regard, the purpose of the study is determined as the need for a theoretical and legal substantiation of the concept of public control and supervision in the economy, its structural and functional content and place in the general system of public administration. The materials for the study are the scientific works of domestic and foreign scientists in the field of public control and supervision, their individual areas (public financial control, public environmental control, etc.). Various opinions on the structural and functional content of public control and supervision in the economy, its individual areas, assessment of the subject composition, goals and mechanisms for implementing such activities have formed the basis for classifying the existing scientific approaches to justification of public control and supervision in the economy. It is proposed to distinguish at least three approaches to such justification: from narrow (public control and supervision as control and supervision of public authorities) to two options for a broader approach (at the national and supranational levels). The latter seems relevant from the point of view of unification of states on economic basis and formation of regional markets for goods and services in the modern economic space.

Tsaregradskaya Yu.K. Financial control as a factor of effective public procurement management

The subject.Financial security of public procurement at the expense of budgetary funds requires the creation and functioning of an appropriate system of public financial control implemented not only by public authorities (legislative, executive, judicial) but also by society. It is shown that the objectivity of control is formed by the parallel financial control, both from the state and society. This interaction forms a public management system in the field of public procurement, guaranteeing the balance of public and private interests. The goal of the study: confirming the hypothesis that there is a particular type of financial control, the public financial control of public procurement. General scientific (analysis, synthesis, method of modelling) and private scientific (comparative-legal) methods are used to achieve the goal. The main results.The authors' definition of public financial control of public procurement is a combination of state financial control, departmental financial control, internal financial control (internal financial audit) and public financial control, aimed at the compliance of customers with the rules of financial law and legislation on public procurement for effective and proper use of budgetary funds, as well as other resources aimed at protecting the public interest in the process.Taking into account the large-scale use of digital technologies in the financial control of public procurement, we confirm the hypothesis about the transformation of methods of public financial control of procurement sphere from the traditional ones to monitoring, or digital financial control of public procurement, viewed as one of the main methods of curement. Given that digital technologies are quite actively used in public administration, the application of public procurement control is an effective method that allows checking the legality and properness of public finance expenditure. The novelty of the study lies in structuring financial control as a factor of effective management of public procurement in Russia. Conclusions. The authors emphasize the priority method: financial controlling of public procurement allows using the risk-based approach to minimize the role of the "human factor" in public procurement and reduce the costs of organizing controls and maintaining a large staff of financial control bodies.

Public management reform under the dome of accruals (Presidential Decree 54/2018): Investigation of the effects on the financial information and the audit of the General Government entities

Presidential Decree 54/2018 legislated the introduction of accrual basis accounting from 1/1/2023 to all entities of the General Government of Greece in accordance with the European System of Accounts 2010. We study the effect of accrual basis accounting under the 54/2018 on financial information and audit of entities, as well as the transition process. The research was conducted using the qualitative method, the structured interview protocol was the data collection tool and the participants were the employees of the Third Department of the General Government Accounting Plan. We find that there will be objective information of the entity's financial position and performance, depreciation, provisions, impairments and fair value of assets. Transparency and accountability are strengthened, audits are facilitated to establish useful sound financial management, there is a central control of public finances and the phenomena of corruption and financing of public officials will be reduced. The job of the audit mechanisms is strengthened, audits become more effective and the way available resources are managed is more precisely controlled. Major difficulties during the transition are the lack of personnel and an appropriate accounting information system, and in combination with the covid-19 pandemic, it was noted that the transition cannot be implemented on 1/1/2023 and for that reason our results suggest an extension to 2025 for the transition, proposal which was implemented on July 30, 2022 with Law 4964/2022.
 
 EL Classifications: H83, P41, M48.
 Key words: Accrual Accounting, Accounting Reform, General Government, Accountability, Audit.

Control of Public Finances in French Law: Selected Institutional Aspects

Abstract This publication is a part of a study of the French Code des juridictions financières in the field of the institutional aspects of the control of public finances. The main purpose is not only to describe the specificity of the French legal system in this field but also to focus on the solutions and type of support institutions that were developed by the French legislator. The general control exercised by the Court of Auditors (Cour des comptes) and regional and territorial audit chambers (Chambres régionales et territoriales des comptes) can be more effective thanks to the so-called supporting institutions, such as the Court for Budgetary and Financial Discipline (Cour de discipline budgétaire et financière), the Supreme Council of Public Finance (Haut Conseil des finances publiques), or the Tribunal for Compulsory Contributions (Conseil des prélèvements obligatoires). This study and analysis of the provisions of the Code des juridictions financières related to the three above-mentioned supporting institutions may also be considered as the first step towards further in-depth analysis and research, and thus the possible application of structures and solutions that are present in French tax law by the Polish legislator or that of any other European country.

New Technologies in the Control of Public Finances and Building Public Confidence in the State

Abstract This article addresses the directions of change in the area of control of the collection and distribution of public funds, in the context of the possibility of using new technologies, with a view to compliance with the legal standards of a democratic law-governed state and the challenges facing law-makers in properly legislating the use of AI. Issues related to the risks and threats posed by the implementation of new technologies in the public sector regarding technical (e.g. algorithmic bias) and legal (e.g. inadequate regulation of the possibility of using technology by a public administration) aspects are raised, bearing in mind that incorrect regulation of these issues is not without impact on trust in the state and ensuring the protection of democratic values. Analysing the issues related to the implementation of technological solutions to control public finances, it also indicates new areas for control in the public sector, for example the control of algorithm-based applications.

AI Enables the Control of Public Finances: US Federal Government Initiatives

Abstract In this article, the authors assesses the scope of the use of artificial intelligence technology in the management of the US federal public finance system in the years 2019–2022, with particular emphasis on public finance control. This assessment is indispensable in answering the question of whether artificial intelligence, which is a relatively new technology, is used in the area in question, and to what extent, and most importantly whether, it enables the US federal administration to control public finances. In order to answer this question, a holistic review was carried out of American law standards from the last decade and government documents that directly regulate the issue of artificial intelligence, including the definition of artificial intelligence adopted for the first time in American law, but also a number of other hard law and soft law standards. Law files that are directly or indirectly related to AI. The above allowed the determination of the scope of the political and legal approach to artificial intelligence in the United States of America, as well as the extraction of many conclusions about the use of artificial intelligence and the challenges facing its development. In the opinion of the author, the added value of this publication is the preliminary answer to the question of whether artificial intelligence can change the paradigm of the essence of managing the public finance system.

КОНТРОЛЬ ЗА ВИКОРИСТАННЯМ ДЕРЖАВНИХ КОШТІВ

The article is devoted to the study of control over the use of public funds on the basis of local budgets of Ukraine, considers the essence, principles, functions, current tasks, types, forms and methods of public financial control. The influence of state control of local budgets is revealed, the principles of public administration in the part of finances are substantiated. The purpose is to reveal the influence of state control of local budgets, the principles of public administration in the field of finance are substantiated. The control of public finances is carried out in order to ensure legality in the field of relations with special state bodies, prevention of financial violations, strengthening financial discipline in the formation, distribution and use of public funds. The role of public financial control is constantly growing, as it is an important means of administrative and legal regulation of economic, political and social processes in Ukraine, is not only a guarantee of transparency of state bodies and local governments, but also a guarantee of financial stability. Control over public funds is especially important in the field of public administration, as the effectiveness of its implementation depends on the successful development of the state economy. In addition, control over the distribution and use of public funds to the standards of public financial control will improve the coordination of regulatory bodies in managing budget processes at all levels of the budget, the implementation of control measures and management decisions. The practical application of state control, in particular the conduct of effective audits, will increase the effectiveness of control measures, create conditions for coordination of control bodies and controlled entities of state financial control, increase revenues to local budgets. The differences of the world's leading countries in terms of public financial control are presented.

Parliamentary Control of Public Finances: European Experience and Ukrainian Realities under Conditions of War and COVID-19 Pandemic

The war and the COVID-19 pandemic posed a great challenge to Ukraine from the point of view of public finances. The purpose of the study is to systematize the European experience and analyze the Ukrainian practice of implementing parliamentary control of public finances in the conditions of war and the COVID-19 pandemic. The methodological basis of the study is a systematic approach to the study of the process of parliamentary control of public finances in the conditions of war and the COVID-19 pandemic. To achieve the goal, the research used scientific methods such as: the dialectical method, the method of comparative analysis, the methods of synthesis and systematization, abstraction, generalization, and the graphic method. The mechanism of parliamentary control in the field of public finances in Ukraine is analyzed, which allows the legislative branch of power to guarantee that public funds are used responsibly and efficiently. The functions of the Accounting Chamber of Ukraine, which is an independent body that monitors and controls public finances in Ukraine, are analyzed. The problems with ensuring parliamentary control of public finances are outlined, and measures to improve the efficiency of these processes are presented. The experience of the member states of the European Union in the implementation of parliamentary control of public finances has been analyzed, which will contribute to the analysis of the possibilities of implementing successful experience in Ukrainian practice.

Public financial control in Russia: modern problems and ways of improvement

This article is devoted to the analysis of the Institute of public financial control in the Russian Federation. The paper explores various points of view in the scientific and educational literature regarding the legal nature and essence of public financial control in Russia. The authors substantiate the position according to which public financial control can be both internal, carried out, in particular, by trade union organizations, and external, which is carried out by other subjects of public control, checking financial and related issues of the activities of business entities, including public authorities, state and municipal organizations, other bodies and organizations implementing on the basis of federal laws, separate public powers. The article analyzes the common features and differences between the institutions of public financial control, public tax control and public budget control. The authors use a number of scientific research methods: formal-logical; comparative-legal; historical-legal; statistical; sociological; financial analysis; method of analyzing specific legal situations. The authors analyze modern problems that hinder the optimal organization and implementation of public financial control measures in the Russian Federation, among which are: a) the failure to consolidate this institution of civil society in the country's Constitution and current legislation; b) the lack of a unified understanding of legal grounds, limits, forms, methods and types of measures in scientific legal doctrine public financial control; c) the lack of real powers for the subjects of public control to carry out the above-mentioned measures; d) the lack of specialized subjects of public control in this area of its implementation; e) the insufficiency of the material, technical and organizational and legal base of subjects of public control for the implementation of these measures; f) weak use of positive foreign experience in this area. The article develops and substantiates a system of measures to resolve these problems.

Трансформация учета и отчетности государственных финансов цифровой среды нацпроекта «Цифровая экономика»

The article presents the current aspects of the implementation and implementation of the transformations identified by the national project Digital Economy, forms a systemic view of institutional support and regulatory policy including those that affect current changes in the accounting and reporting of budgetary institutions in the digital environment of public administration. There have been evaluated the factors of functional and institutional transformations of the state regulatory support for the implementation of the national program Digital Economy of the Russian Federation; considered the theoretical and categorical apparatus of the digital environment, fundamental approaches and features related to the introduction of digital platforms and ecosystems for accounting and control of public finances of budgetary institutions; proposed the concept of a graphical model for the development of technological sovereignty in the digital environment of public administration, highlighting the key elements, subsystems and external zones of influence using the example of national project Digital Economy. There are shown the results of analysis of budget cuts for the implementation of national projects of the Russian Federation, made the forecast for the prospects and features of budget accounting, and offered the author’s concept of an abstract model for the development of technological sovereignty in the digital environment of public administration. The presented results are proved to fully reveal the topic of scientific research in transformation of accounting and reporting the public finances in the digital environment of the national project Digital Economy. Conclusions are drawn about the need to create and apply by institutions a unified accounting methodology, electronic document management and centralization of accounting, which will contribute to the orderliness of financial data and optimization of accounting processes.

Impact of Digital Tools and Technologies on The Effectiveness of Financial Control

The article presents dwells on the legal consolidation of the principles of public financial control in the era of digitalization and used as part of the control of digital tools and technologies in the Russian legal field. The study materials include the Constitution of the Russian Federation, Russian and international legal acts (laws and standards), and the websites of Russian public authorities with powers in the field of financial control. To process such materials, the authors used technical and legal analysis as the main method. They conclude that the legal regulation of the principles of public financial control in the Russian Federation is fragmentary. Based on the study of network information resources of Russian public authorities, there is a set of digital tools and technologies used to organize and conduct financial and control activities in a non-contact form. This system includes three main blocks: information systems, personal accounts, and registers. According to the authors, the legal relations that arise in connection with the use of digital tools in financial control are heterogeneous: some are directly related to particular digital technologies (tools); others do not consider a digital product an object of legal relations and assign it an auxiliary value.