Improving the efficiency of budget expenditures is one of the most important tasks facing state and local government bodies. The current stage of development of Kazakhstan is characterized by the setting of large-scale national socio-economic tasks, the solution of which should be carried out on the basis of qualitative transformations and improving the efficiency of the state in various spheres of the economy. This is the goal of the current administrative reform, the essence of which is to create an effective system of public administration, as well as the budget reform, which provides for the transition to the formation and execution of budgets at all levels based on the set goals of the state policy and the expected results of their achievement. In this regard, decisions should be based on improvement and the necessary assessment of the effectiveness of using of the budget.
The budget process in the Republic of Kazakhstan is a centralized budget planning with a fairly strict regulation of expenditures of the republican budget using a detailed budget classification. Given that the implementation of the budget process is a complex, painstaking work, the need to improve the control of the effectiveness of the use of budget funds is an important element of effective public administration. That is why, in many countries, the audit of the efficiency of the use of budget funds is one of the most important types of public audit and control and has been used for the last decades.
Why is the question of the efficiency of spending public funds relevant?
The activities of the state should have a significant impact on certain key economic and social indicators. The result of an effective public sector is the right spending and efficient allocation of resources. Government spending in developing countries usually accounts for a significant share of GDP. Consequently, even small changes in the efficiency of public spending can have a large impact on GDP and on the achievement of government goals.
The experience of recent years has shown that proper budget planning supports the foundations of modern public administration: transparency, integrity, openness, participation, accountability, and a strategic approach to planning and achieving public goals. Thus, in accordance with the rating of the efficiency of public spending made by experts of the World Economic Forum in 2018, the Republic of Kazakhstan ranked 65th out of 136 countries in this indicator. At the same time, the established development trend is aimed at further reducing this indicator. In quantitative terms, it was 3.3 points. (1 = extremely inefficient; 7 = extremely efficient). For example, from the CIS countries - Azerbaijan on the 17th place (4.7 points), Tajikistan on the 34th place (3.9 points), the Russian Federation on the 57th place (3.4 points). The rating data show that Kazakhstan still has a lot to do to improve the efficiency of using budget funds.
In the Republic of Kazakhstan, the supreme audit body of public audit and financial control - the Accounts Committee for Control over the Execution of the Republican Budget-deals with issues of public audit and control over the effectiveness of the use of budget funds. In November 2015, the Law of the Republic of Kazakhstan "On Public audit and Financial Control" was adopted to implement the Concept of Implementing Public audit in the Republic of Kazakhstan, approved by the Decree of the President of the Republic of Kazakhstan in September 2013, which provided for the legal mechanism for implementing the public audit system, defined the types, directions, subject matter and basic indicators of public audit, including performance audit, and defined the status and powers of the Accounts Committee.
In accordance with this Law, the Accounts Committee has broad powers to conduct an audit of the effectiveness of the use of budget funds. This is an audit of the effectiveness of: planning and execution of the republican budget, the implementation of documents of the state planning system in terms of the execution of the republican budget, the implementation of development strategies and development plans of national management holdings, national holdings, national companies whose shareholders are the state. In addition, reports of state bodies, state institutions, quasi-public sector bodies and recipients of budget funds are subject to audit.
One of the main functions of the Accounts Committee in the audit of the effectiveness of the use of public funds is a preliminary assessment of the draft republican budget. The budget is evaluated according to two criteria: reliability and justification of expenditures, with the provision of appropriate recommendations. The assessment is based on preliminary data on the draft budget and is submitted to Parliament at the same time as the draft budget to assist Parliament in its review.
Annually, the Accounts Committee prepares an opinion to the Report of the Government of the Republic of Kazakhstan on the implementation of the republican budget. At the same time, the effectiveness of the use of the republican budget funds is evaluated in the following areas:
- - Assessment of the effectiveness of the implementation of state programs;
- - Assessment of the effectiveness of the use of budget funds allocated to central state bodies;
- - Assessment of the effectiveness of asset management of quasi-public sector entities;
- - Analysis of the effectiveness of the implementation of public-private partnership projects.
Since 2011, Kazakhstan has carried out measures to reform the accounting and financial reporting system in the public sector. As a result, since 2013, all government agencies have switched to the accrual method in accordance with regulations based on IPSAS. As a continuation of the reforms, the preparation of the annual consolidated financial statements of the republican budget and its inclusion in the annual reports on the implementation of the republican budget began in 2019. Since January 2020, the Accounts Committee for the first time began to audit the consolidated financial statements of the Republican budget (CFS of the RB). The main purpose of the audit is to confirm the reliability and objectivity of the information consolidated at the level of the republican budget on the property status and financial results of the state for the reporting period. In this direction, the Accounts Committee has developed and approved procedural standards for external public audit and financial control, taking into account the requirements of international standards, as well as adopted other legal acts of a methodological nature.
In general, it should be noted that the improvement of the budget process in the Republic of Kazakhstan with the direct participation of the Accounts Committee has led to a reduction in inefficient expenditures and a reduction in budget adjustments by two (2) times over the past few years.
The audit of budget efficiency conducted by the Accounts Committee shows that to improve the efficiency of budget use, it is necessary to: improve the quality of budget preparation, taking into account performance indicators by managing the number of programs, the volume of data and improving the quality and relevance of performance indicators used in different industries; provide a more complete picture of government obligations, including disclosure of guarantees, contingent liabilities, PPPs and concessions; ensuring competitiveness in procurement (reducing the grounds for public procurement from a single source and state tasks, unifying procurement of quasi-sector entities); changing approaches to the development of design and estimate documentation: to fix the requirements for mandatory state expertise of new projects implemented at the expense of budget funds and funds of quasi-public sector entities; to introduce the practice of building facilities using design solutions for similar and already implemented projects with their binding to the territory; review the cost parameters in the construction standards, including by excluding the costs of work (services) that are unclaimed due to the automation of processes; develop quality characteristics for construction materials that are included in projects; optimize the standards of costs for the maintenance of objects built with the use of innovative and saving technologies; change the approaches to borrowing: timely development of loans (minimizing the fee for reserving external loans); expansion of alternative sources of financing (PPP, extra-budgetary funds); attraction of loans exclusively for projects focused on the economic effect (leveling the facts of cancellation of loans due to the inexpediency of further implementation of the project).
Also, it is advisable to review the current system of budget monitoring, comparing the timing of the evaluation of the effectiveness of the implementation of program documents and the activities of state bodies, the preparation of a report on budget execution and the publication of reporting statistics in order to ensure their synchronization.
In conclusion, I would like to note that the activities of the Accounts Committee in the issue of conducting an audit of the effectiveness of the use of budget funds are constantly supported by the state authorities in the person of the President of the country, the Parliament in the further improvement and development of this area of public audit.