Public Financial Control Research Articles

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Objective. Research of theoretical bases of an estimation of efficiency of the state financial control. Methods. To achieve this goal, the authors used a systematic approach, methods of analysis, synthesis, comparative legal method and graphical presentation of research results. Results. It was found that the effectiveness of the system of state financial control over the implementation of local budgets is an important problem in the context of decentralization of financial resources of the state. It is established that there is no system of indicators of efficiency of the state financial control both in a part of separate controlling bodies, and control measures which they carry out. Scientific novelty. � set of criteria and indicators aimed at studying the qualitative characteristics of both individual control measures and individual controlling bodies that form the system of public financial control is determined. Practical significance. The expediency of application of the proposed criteria and indicators for assessing the effectiveness of control over the use of funds from local budgets is substantiated. Areas of improvement of control over the use of funds of local budgets. Key words: budget, evaluation system, quantitative indicators, qualitative indicators, evaluation criteria, state financial control.

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Objective. Research of theoretical bases of problem questions and perspective directions of improvement of the state financial control. Methods. To achieve this goal, the authors performed the following tasks, explored the essence of public financial control, analyzed the main problems of the supervisory authorities, suggested possible ways to improve the system of public financial control in Ukraine Results. It is revealed that the efficiency of public financial control systems is affected by the smallest transformations that occur in the field of control. It is established that such transformations lead to changes in the mechanism of public financial control, importance. Scientific novelty. It is determined that now the state needs to focus on such areas of public financial control as development of control standards, improvement of the legal framework, which should correspond to the current situation and a common methodology of state control, as well as efforts to develop information technologies. information space of control activity. Practical significance. The expediency to focus on solving a number of problematic issues that hinder the development of the financial control system in the country or have a negative impact on it is substantiated. In particular, it is first of all necessary to monitor the real possibility of ensuring effective control over the management and use of state (local) resources at the central, regional and local levels by relevant state bodies exercising such control and identifying legislative and administrative problems. Key words: budget process, budget legislation, control, financial control, state financial control, state financial control, internal financial control, system of state financial control bodies.

On Priority Research Problems in the Scope of Public Finance Control in Poland

Abstract This article presents ten priority research problems in the scope of public finance control in Poland with a synthetic discussion of their aims. Implementation of the proposed research should serve a harmonious development of a part of financial law - called control of public finance. The article is mainly based on the Author’s own views and should encourage further scientific discussion on the mentioned topics.

Виконання Державного бюджету України в умовах пандемії COVID-19

The article analyzes the state of formation and efficiency of the State Budget of Ukraine. It has been established that budget expenditures exceed revenues and as a result, the budget has been formed over the last decade with a significant deficit, and the existence of a deficit leads to a movement in the "debt spiral". To implement the budget the Government is forced to borrow additional funds and attract them on acceptable terms, which has become increasingly difficult. Failure to receive the funds leads to late spending. The analysis of expenditures of the State Budget of Ukraine according to the functional classification is carried out, which testified to the main priorities of the state in modern conditions. Given Russia's aggression in the east of the country, it is logically justified to increase security and defense spending. However, it is advisable to review social expenditures, which are quite large in size and do not improve the quality of social services, on the contrary, restrain economic growth, the country's transition to an innovative model of development. In order to increase the efficiency of budget execution, the validity of macro indicators, it is advisable to introduce medium-term budget planning. Budget expenditures must be justified and balanced in order to achieve the most effective results of budget programs and the goals of the budget system of Ukraine. The study identified systemic shortcomings in the State Budget of Ukraine, which are repeated from year to year, as well as those that characterize the special year 2020 associated with the pandemic COVID-19. Emphasis is placed on the functioning of the domestic system of public financial control and its importance in reducing the volume of budget violations, the effectiveness of budget execution, promoting better functioning of the financial and budgetary system, ensuring sustainable dynamics of socio-economic development of the country.

On the Application of Information Audit for the State Public Audit

The paper analyzes methodological approaches to the implementation of information audit by public audit institutions. The aim of the research is to analyze instruments of the traditional information audit developed as a part of information management theory and to make propositions on its basis on the creation of methodology of information audit as a form of public audit. It is based on general scientific methods, including comparative analyzes. The article substantiates the necessity for public audit institutions to conduct information audit due to the key value of information and information resources for the legality and efficiency of the public resources' management. The authors analyze basic approaches to the definition of the traditional information audit and its instruments. Based on this the authors made a conclusion that such general approach could be used for the purposes of public audit with necessary amendments due to specific aims of this type of public financial control, legal status of public audit institutions and position of auditees in the public management system. The study defines basic stages of the information audit conducted by public audit institutions and unique characteristics of its aims due to their interrelations with the tasks of audits and analytical research performed by such bodies. The paper also proposes basic instruments for the data collection as well as a general approach to interaction between auditors conducting information audit, auditees and other stakeholders.The practical results of the research are relevant for the introduction of information audit instruments into the practice of public audit institutions and for the development of applicable methodological documents.

Improvement of the monitoring process during the functioning of risk-oriented internal control

This article summarizes the arguments and counter-arguments within the scientific discussion on the issues of internal control and risk management. Systematization of sources and approaches to solving the problem of improving the efficiency and quality of internal control has shown that the monitoring of internal control measures plays a significant role in the subject process. Internal control in the Ministry of Defense of Ukraine and the Armed Forces of Ukraine is implemented to meet the requirements of a number of documents of national importance in the field of public internal financial control of Ukraine. The study of improving the quality of internal control monitoring in the article is carried out in the following logical sequence: the main aspects of the regulation of monitoring of control measures in the process of functioning of the internal control system are considered; recommendations for improving the quality of internal control monitoring are provided. The article provides a partial analysis of the regulatory framework in the subject area in order to find relevant innovations in the regulation of internal control and risk management in budgetary institutions. Currently, the Ministry of Defense of Ukraine is a leader among other Central executive bodies in the implementation of internal control and risk management, so this experience can be used in other areas where there is a need for risk management. The results of the study can be useful for managers, researchers, risk managers, and for all who are interested in risk-oriented internal control and risk minimization in their activities. The article uses methods of scientific knowledge: analysis and synthesis. The main purpose of the study is to provide the head of the institution with recommendations aimed at improving the system of internal control in the subordinate institution by improving the process of monitoring the implementation of control measures.

Analysis of budget expenditures for the digital transformation of the public administration and public financial control

Analysis of budget expenditures for the digital transformation of the public administration and public financial control

Current State and Perspectives of Legal Support for Digital Transformation of the State Audit Office of Ukraine

Improving the efficiency of the State Audit Office of Ukraine in exercising public financial control is largely determined by the success of the digital transformation of such activities. The legal support of such a process is important. The authors of the article outline the current state and perspectives of legal regulation of digital transformation of the State Audit Service of Ukraine for public financial control, identifies problems of legal regulation of digitalization of this service and ways to solve these problems. In particular, it is noted that one of the important issues is the legal regulation of the automated integrated information database on the status and results of state control over the management and use of state and local resources of the State Audit Service and other state control agencies, as well as databases and registers, the operation of which is financed from the state budget. Given the interdepartmental nature and the fact that the maintenance of some state registers is determined at the level of laws, the need to adopt a relevant law is not excluded. At the same time, appropriate amendments should be made to the Law of Ukraine "On Basic Principles of Public Financial Control in Ukraine", Regulations on the State Audit Office, Procedures for Inspection and Public Financial Audits, Inspection and Monitoring of Public Procurement, which should be supplemented by state financial control entities, in the order of information interaction or by direct access to them. In addition, it is impossible to solve the issue of digital transformation of the State Audit Office without raising the level of knowledge and appropriate training of its employees.

Legal Status of the Accounting Chamber of Ukraine: Current State and Perspectives of Development

The bases of the legal status of the Accounting Chamber have been studied: rights, duties, responsibilities, principles, purpose, functions, place of the Accounting Chamber among other state agencies and their interaction. It has been emphasized that the Accounting Chamber should be assigned the status of the Supreme Audit Institution in order to harmonize the legal definition of the legal status of the Accounting Chamber with international standards, namely the Lima Declaration of Control Guidelines, which should assist in expanding the powers of the state agency and should facilitate the effective realization of control functions. The authors have studied the problem of compliance of the Accounting Chamber with the principle of independence contained in the Constitution of Ukraine and in the Law of Ukraine “On the Accounting Chamber”.
 The emphasis has been placed on the fact that the legislator identifies the legal categories of “state financial audit” and “state external financial control (audit)” in the Law of Ukraine “On the Accounting Chamber”, by using the phrase “state external financial control (audit)”. It is the basis for authors to emphasize the importance of adopting a regulatory act, which will be designed to distinguish between basic categories (concepts) in the field of public financial control (audit). The need to consolidate the functions of the Accounting Chamber at the legislative level and their delimitation with the powers of a state agency has been substantiated. The need to supplement the title of the Law of Ukraine “On the Accounting Chamber” with the word Ukraine has been emphasized.
 The shortcomings of the legal regulation of the institution of responsibility of officials of the Accounting Chamber have been highlighted. The emphasis has been placed on the fact that the mechanism for bringing officials of the Accounting Chamber to disciplinary responsibility is not regulated at a high level. The authors have emphasized on the improvement of normative and legal regulation of the special procedure for bringing guilty persons to administrative liability by authorized persons of the Accounting Chamber for violation of the law. Based on the analyzed experience of the Accounting Chamber of France, the authors have suggested the ways to improve the legal status of the Accounting Chamber of Ukraine.

THE EXAMINATION OF PERCEIVED ORGANIZATIONAL SUPPORT (POS), ORGANIZATIONAL CYNICISM AND COUNTER PRODUCTIVE WORK BEHAVIOR (CWB) IN PUBLIC EMPLOYEES: INTERGROUP GAP ANALYSIS

Public organizations in Turkey adopted working principles such as citizen-orientation, transparency, accountability, efficiency and effectiveness with Law No. 5018 Public Financial Management and Control Law in parallel with the new development trends of giving up the traditional understanding of public administration. The most important factor is human capital in public organizations aiming at ensuring citizen satisfaction. In this article; levels of organizational cynicism, perceived organizational support, of public employees and their counter-productive work behaviors (CWB) were analyzed according to demographic variables (age, marital status, working time, education level, service period, service class). According to results of the analysis, significant differences were found for each variable in one or more scales. The results of this research indicates that should take measures to increase POS and reduce organizational cynicism in order to reduce and/or eliminate the CWB. So, Civil Servants Law No 657 (DMK), to which civil servants are subject, should be reformed by increasing effectiveness of merit system which is already an element of Law no 657. In this context, it should be remembered that not only competence and expertise, but also ethics and moral are an element of merit. When considering in the macro sense, merit constitutes one of the basic building blocks for the development and growth of a country in terms of both public and private sector functioning.

Risk-oriented external and domestic public financial controls: general and private in approaches to implementation

In this paper, the authors analyze the existing set of guidelines for applying a risk-oriented approach to the planning of control bodies for internal and external public financial control; an important part of the study is the authors’ thesis on the search for ways to unify the experience of risk-oriented planning in the activities of internal and external government financial controls. To find an answer to this question, the authors conduct a comprehensive study of the application of a risk-oriented approach to the planning of internal and external government financial controls in the context of the list of criteria, which include the order and methods of determining risks, their understanding, as well as the very concept of “risk-oriented approach”.

The Effect of Public Finance Control on the Improvement of Work of Internal Auditors in Enterprises Founded by the Local Self-government Units on the Example of the Republic of Serbia

This study shows the importance of introducing control over the work of internal auditors in public enterprises. The aim of the study is to indicate possible benefits in the operations of public enterprises following the control conducted over the work of internal audit by public finance bodies. To reach their aim, the authors conducted a research and determined the existence of differences in the efficiency of operations in public utility enterprises with internal audit in place before and after the control conducted by public finance bodies. The obtained results show there is a strong impact of the control performed by the public finance bodies set up to supervise the work of internal auditors in public enterprises on the operating results expressed as total revenues of public enterprises.

Public financial control in Ukraine: state, problems, prospects

The authors assess the current state of public financial control in Ukraine, identifies its main problematic aspects and suggests ways to solve them. There is a direct interdependence between increasing the level of corruption and weakening the effectiveness of public financial control. Forms and types of public financial control are considered depending on controlling subjects. The authors identify forms of public sector audit according to the ISSAI standards which include financial audit, performance audit and compliance audit. The paper touches upon the necessity of legislative introduction of audit of conformity with the corresponding definition of the purpose, tasks, subjects, objects, methods and procedures. It is proposed to implement the Standard for Auditing the Compliance of Public Resources, which will define general provisions, principles and criteria of compliance audit, as well as the procedure for planning, directions, methods and control points in its implementation, generalization and implementation of results. The main generalized indicators of activity of the Accounting Chamber in the period between 2009 and 2019 are presented and the basic trends in the development of the public financial control are covered. It characterizes the number of inspected objects, prepared reports, the volume of detected violations, the number of relevant response documents and the amount of estimated funding. The structure of identified violations in the main areas includes violations of the budget legislation, inefficient management of funds and violations of the administration of the revenue side of the state budget. The basic criteria for carrying out performance audit are defined and their analytical assessment is provided. The main directions of improvement of the public financial control with the use of key characteristics of the concept of good governance are offered, the fundamentals of which include the rule of law, equality, inclusiveness, efficiency, transparency and accountability. It is recommended to introduce and use a unified report on budget offenses, which will facilitate communication between regulatory authorities and allow for receiving, processing and storeing large amounts of information on the results of auditing.

Организационно-правовые особенности деятельности региональных контрольно-счетных органов России — участников Европейской организации региональных органов внешнего контроля государственных финансов: к вопросу об эффективности членства в ЕВРОРАИ

This article is devoted to the study of the characteristics of the organization, activities and legal regulation of the European Organization of Regional External Public Finance Audit Institutions (EURORAI). The role of EURORAI in the development of Russian legislation governing the organization and activities of the control and accounting bodies of the constituent entities of the Russian Federation and municipalities is analyzed. The article studies the structure, powers and composition of participants in the European Organization of Regional External Public Finance Audit Institutions (EURORAI). Separately, the article considers the issue of legal support for the organization and activities of the European Organization of regional bodies of external control of public finances, as well as its international legal status. The article concludes that the effectiveness of the interaction between the control and accounting bodies — members of EURORAI, is at a low level and practically does not have any effect on the activities of the control and accounting bodies of the constituent entities of the Russian Federation, and is more important for improving its legal status in the regional level.

ОСОБЛИВОСТІ РОЗВИТКУ МЕХАНІЗМІВ ПУБЛІЧНОГО УПРАВЛІННЯ АУДИТОМ

Актуальність дослідження механізмів публічного управління аудитом обумовлена невідкладними заходами, які спрямовані на їх осучаснення в нових умовах. Успішна реалізація цих заходів потребує розроблення нових наукових знань, узагальнення останніх розробок. Механізми публічного управління аудитом досліджено шляхом структурно-змістовного узагальнення на основі використання комплексної описової моделі. Її структура поєднує типові форми об’єктивації теорії і методології цих механізмів. Це поняття, закономірності, концепції, принципи, моделі, різноманіття механізмів і їхні класифікації, інше. Проаналізовано ознаки основних понять щодо аудиту. За результатами їхнього аналізу з’ясовано, що процес розвитку характеризується диверсифікацією: предметного поля аудиту (новими об’єктами є державна політика, публічна служба, публічне управління, ін.); форм здійснення аудиту (новими є дослідницька і рекомендаційна форми, визначення ефективності і результативності, оцінка наслідків державних політик, інше). Розроблено і охарактеризовано механізм розвитку концепцій і механізмів публічного управління, у тому числі аудитом. Його основу становить механізм зміни концепцій і механізмів публічного управління під впливом домінуючих тенденцій еволюції суспільства. Механізм розвитку концепцій і моделей механізмів публічного управління аудитом охарактеризовано за етапами конкретно-історичних періодів еволюції суспільства. Аналіз цих етапів свідчить, що в концепціях і механізмах публічного управління аудитом поступово утвердилися: нові принципи державного (публічного) управління; принципи, що визначають аудит незалежним, демократичним, зовнішнім і обов’язковим. Поступово сформувались і узвичаїлися три світові моделі механізмів публічного управління аудитом: державний зовнішній контроль, державний фінансовий контроль, внутрішній аудит; розмежовано поля їхніх об’єктів. Розроблено і охарактеризовано комплексний механізм публічного управління аудитом у режимі реформ як інструмент інноваційного розвитку зазначених вище моделей аудиту.

РОЛЬ СТРАХУВАННЯ У ЗАБЕЗПЕЧЕННІ ФІНАНСОВОЇ БЕЗПЕКИ ДЕРЖАВИ В УМОВАХ ПАНДЕМІЇ COVID-19

Identification of the main problems in ensuring the financial security of the state is based on a comprehensive analysis and identification of factors influencing the level of protection of the national financial system. The complexity of building the financial system itself during the global pandemic has become much more complicated, but there is a need to review each of its integral parts to objectively assess the overall level of security. Determining the level of financial security is carried out using an integrated index of financial security, which is the sum of integrated indices of certain areas of the budget of financial activities, debt, monetary base, currency, insurance, stocks, banking, investment. The insurance market is one of the key indicators of the level of financial security of the state and its citizens. The insurance market is one of the most important components of the financial sector of the economy. Without a well-developed infrastructure of the insurance market, it is impossible to ensure the progressive socio-economic development of the state. The article summarizes the shortcomings inherent in public financial control at the present stage of its development in the field of insurance. The article analyzes the dynamics of the main indicators of the state of development of the insurance market of Ukraine, identified factors influencing its level of financial security and identified areas for achieving a satisfactory state of financial security of the domestic insurance market. The list of modern threats to the normal operation of domestic insurance companies is determined, their division into internal and external according to the nature of their origin. Statistics on individual parameters that characterize the insurance market are presented. The importance of economic security of insurance companies for the financial, economic and national security of the state is substantiated. The authors of the article identified the factors influencing the state of public financial control in Ukraine and identified areas for improving public financial control in the context of financial security of the state and the insurance market in the COVID-19 pandemic. The article substantiates that the conditions for attracting investment and a safe environment in Ukraine have not yet been formed. The system of indicators and criteria for assessing the level of security of the investment environment should be expanded.

ДЕРЖАВНИЙ ФІНАНСОВИЙ КОНТРОЛЬ В УКРАЇНІ: ЗАРУБІЖНИЙ ДОСВІД

The article is devoted to the study of the state of public financial control in Ukraine based on the experience of developed countries to increase its efficiency. The state and problems of the state financial control of Ukraine for today were analyzed, its features and content were determined. The activity of the state financial control bodies in January-June 2021 and the dynamics of the volume of violations that led to the loss of financial resources, which were identified by the State Audit Office during January-June 2019-2021, are studied. The main financial violations that led to the loss of resources are described. After analyzing the experience of developed countries in the field of public financial control, namely the United States, Germany, Japan, Great Britain, the bodies of financial control of these countries, the peculiarities of their functioning and the principles by which they operate. To date, control activities in Ukraine are assessed by experts, including international ones, as ineffective. First of all, this is due to the significant level of offenses committed in the field of public finances, ineffective warnings, the prompt detection of which is possible due to the coordination of actions of bodies endowed with control powers. Of course, these indicators are influenced by the actual state of war in which Ukraine finds itself, but no less important factor is the political component, capacity and efficiency of governance. Today, the system of public financial control is the engine of qualitative change in the economy as a whole contributes to the security of public financial resources, non-current and other assets, the correctness of determining the needs of budget funds and liabilities, efficient use of funds and property. At the same time, in the current conditions of Ukraine's economic development, the tasks of the financial control system should be determined taking into account the needs of the country's socio-economic development. Accordingly, in modern conditions, the task of financial control becomes the identification of internal reserves of the state, which can participate in resolving crisis issues in the economy and social sphere. State statistics show that regulatory authorities are working to address this issue. The whole situation indicates the need for coordination of financial control, which involves coordination of functions of all controlling entities and concentration of their efforts on priority areas of control, implementation of best domestic and foreign experience, rapid exchange of information between them. The current course of the state in the system of public administration is associated with the need to increase the role of public financial control. However, there are a number of obstacles. One of them is the lack of appropriate legal and methodological framework for public financial control.

INSTITUTIONAL SUPPORT OF PUBLIC FINANCES

Purpose. The purpose of the article is to study the legal and organizational principles of public finance management. Methodology of research. To achieve this goal, the following tools of research methods were used: dialectical - to determine the initial conditions and content of public finance; analytical - when processing literary and Internet sources; causal - to determine the institutional support of public finances; abstract-logical - to generalize the presented material and draw conclusions. Findings. The issues of the essence, structure and peculiarities of the functioning of public finances in Ukraine are studied; the institutional units that ensure their formation and control over their use are specified. The peculiarities of the content of public finances of Ukraine are considered, the peculiarities of their components are determined in order to achieve not only economic, but also social goals by the state. Under the institutional support of public finances, we understand a purposeful hierarchical system of legal institutions that form, use, redistribute and control the funds of the public sector. Thus, based on this, among the components of institutional support are: state; executive, legislative and judicial powers; VRU, CMU, central executive bodies, higher judicial bodies, National Bank, Accounting Chamber; local councils, local executive bodies, budgetary institutions, subjects of state and communal property; advisory bodies under the President of Ukraine, the Cabinet of Ministers of Ukraine; scientific, public and professional institutions (organizations) in the field of public finance. The relevance of the study of issues related to improving the efficiency of state bodies on the basis of recommendations of international organizations and the formation of appropriate regulatory and legal support is substantiated. For example, it was noted that an action plan for the respective years should be developed, which includes directions for each area of the Strategy for Reforming the Public Finance Management System (in our opinion, public) and specifies the state bodies responsible for a particular area of public finance. The bodies of state financial control are determined in accordance with the current legislation, in particular: external control carried out by the legislative bodies - the committees of the Verkhovna Rada and the Accounting Chamber; executive authorities and the central bank - the Cabinet of Ministers (through specialized state bodies) and the NBU; and internal (performed by heads of state bodies) and internal audit (performed by the main managers of budget funds). The requirements of the current legislation to ensure openness of their spending and opportunities for free access to this information in order to strengthen public control over the use of public funds are analyzed. The composition and main problems of institutional support of public finances are formulated and practical recommendations for its evaluation are provided, which will allow to increase the efficiency of public finance management. Originality. The scientific novelty lies in the separation of the content of the institutional support of public finances and recommendations for its evaluation according to the established criteria. Practical value. The main provisions of this study in the form of evaluation proposals can be used to monitor the impact of public reform policy on the development of public finances. Key words: public finance; management; institutional support; public authorities; public financial control.

ДІЄВІСТЬ ДЕРЖАВНОГО ФІНАНСОВОГО КОНТРОЛЮ В УМОВАХ РИНКОВОЇ ЕКОНОМІКИ УКРАЇНИ

The article reveals the essence of state financial control over the activities of budgetary institutions, defines its purpose and objectives at the macro and microeconomic level, presents the bodies conducting external and internal state financial control, analyzes the results of the Accounting Chamber of Ukraine on financial control, outlines the main directions reforming public financial control in the context of strengthening European integration processes. Aspects of the importance and role of public financial control in the system of market relations, the need for its systematic development and improvement of its organization and the definition of effective methods of operation in the future are considered. It is argued that today the system of financial control practically does not perform a preventive function, and mostly states violations. Therefore, it is necessary to create a more integrated, structured system of general financial control in a single information space of public finance management system with mechanisms of interaction, justification of its development strategy, improvement of forms and methods of control actions, increase their efficiency and effectiveness. The need to clarify the conceptual basis for the formation and development of financial control, its organization, understanding of how its bodies function, the development of new methodologies and experience in the implementation of control measures. It is stated that the transformational model of financial control requires the introduction of qualitatively new management at the present stage of development of Ukraine’s economy, which is increasingly acquiring the properties of mixed. It is proved that in practice the weakness of the activity of controlling bodies is the lack of a clear methodological basis for conducting inspections, as the most frequently used audit, which does not allow to identify funds used for other purposes. It is proposed to each body of the system of state financial control to outline the sphere of influence, which will give a real opportunity to purposefully influence the financial policy of the state.

On the place of digital technologies in the system of public financial control

The article examines the legal aspects of the transformation of the system of public (state and municipal) financial control, observed in the process of the ongoing transition of the Russian state to the digital economy and digital public administration. The existing prerequisites for the construction of a new paradigm of control in the field of public Finance are considered and the main new (digital) mechanisms used in the activities of regulatory authorities are analyzed. The work mainly involved the formal-dogmatic method of research and the method of referring to the borderline branch of legal Sciences. As part of the second method, some works on Civil and Labor law were analyzed in terms of the use of new digital technologies. It was concluded that digitalization allows to conduct state (municipal) financial control at a completely new level, but it also entails new problems (risks), the identification and elimination of which is yet to be implemented.