Financial Control Officer

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9 Νοε 2013 (πριν από 3 χρόνια και 8 μήνες)

59 εμφανίσεις

1

RECENT DEVELOPMENTS IN
THE AREA OF PUBLIC
INTERNAL FINANCIAL
CONTROL IN TURKEY AND
THE RELATIONS WITH THE
EUROPEAN UNION



2

PUBLIC FINANCIAL MANAGEMENT
-
1


Public Financial Management,

covers the institutions
and processes related to the management of public
resources. This process consists of three stages.


Determination of policies and priorities


Allocation of the resources of the country in accordance
with the specified policies


Establishment of control and audit mechanisms aiming
to ensure the economical, effective and efficient
acquisition and utilization of public resources


Ability to execute the fiscal policy in an effective manner
depends on the capacity of the public financial
management.

3

PUBLIC FINANCIAL MANAGEMENT
-
2


Determination

of

the

policies

and

priorities


A

government

which

operates

efficiently

is

required

to

make

strategic

decisions

considering

also

the

resource

constraint,

to

make

medium

term

plans

in

order

to

implement

these

decisions

and

to

form

a

budget

in

a

way

to

support

these

policies
.



This

depends

on

reinforcing

the

policy

production

capacity

and

the

budget

processes
.


4

PUBLIC FINANCIAL MANAGEMENT
-
3


Allocation of the resources in accordance with the
determined priorities
: Budget


Budget
;


is

the

allocation

instrument

of

the

limited

resources
.


is

the

instrument

of

realizing

economic

plan

and

policies
.


is

a

basic

political

choice

indicating

what

amount

of

the

common

public

needs

is

to

be

covered

by

the

government
.


is the financial reflection of the government
policy.

5

PUBLIC FINANCIAL MANAGEMENT
-
4


Establishment

of

the

mechanisms

relating

to

the

control

and

audit

of

the

utilization

of

public

resources


These

mechanisms

are

called

financial

control
.


Internal

Control


Financial

Services

Unit


Ex

ante

control


Ex

post

internal

audit



External

Audit


Another

element

of

the

audit

mechanism

is

financial

reporting

and

the

existence

of

a

budget

code

structure

and

government

accounting

compatible

with

this
.

Improvement

of

financial

reporting

is

among

the

main

factors

of

transparency

and

accountability
.


6

CRITICISM OF OUR PUBLIC FINANCIAL
MANAGEMENT SYSTEM
-
1


narrowness

of

the

financial

management

system

and

the

scope

of

the

budget


increase

in

the

extra
-
budgetary

expenditures


break

of

the

link

between

the

development

plan

and

the

budgets


failing

to

use

public

resources

in

an

efficient

manner


spending

process

is

subject

to

a

strict

preliminary

control


failing

to

strike

a

fine

authority
-
responsibility

balance

in

the

spending

process


not

enough

initiative

is

provided

to

the

administrations

in

the

course

of

budget

preparation,

execution

and

control

process



7

CRITICISM OF OUR PUBLIC FINANCIAL
MANAGEMENT SYSTEM
-

2



Narrow

scope

of

the

audit

of

the

Court

of

Accounts


Insufficiency

of

the

budget

code

structure


Insufficiency

of

the

accounting

system


The

system

does

not

include

the

principles

of

strategic

planning,

multi
-
year

budgeting,

performance

based

budgeting,

accountability,

fiscal

transparency,

efficient

internal

financial

control,

which

are

predominant

in

the

modern

concept

of

public

financial

management


Insufficiency

of

the

automation

and

information

system

of

the

financial

management



8

TRANSFORMATION IN PUBLIC
FINANCIAL MANAGEMENT


Defects

of

the

current

system


Internal

factors


Increasing

public

sensitivity

in

terms

of

the

utilization

of

public

resources


Transformation

demands

formed

in

the

public

sector

and

academic

circles


External

Factors


The European Union harmonization process.


Relations

with

the

IMF

and

World

Bank

9

TRANSFORMATION ACTIVITIES IN
PUBLIC FINANCIAL MANAGEMENT


The

following

include

certain

changes

considered

to

be

made

within

the

framework

of

the

criticised

issues
:


8
th
.

Five
-
year

Development

Plan


Report

of

the

Specialization

Commission


Programs

of

2001
,

2002
,

2003



National

Program

(
2001
),(
2003
)


Accession

Partnership

Document


Letters

of

Intention

to

IMF


Action

Plan

for

increasing

transparency

in

Turkey

and

improving

efficient

management

in

the

public

sector


Government

Program

and

the

Urgent

Action

Plan

of

the

59
th

Government



10

NATIONAL PROGRAM (2003)
-
1


As

regards

the

chapter


28
-
Financial

Control”

of

the

Negotiation

Topics
;


Adoption

of

the

public

internal

financial

control

legislation,

in

compliance

with

EU

practices,

international

control

and

auditing

standards,



Strengthening

the

administrative

capacity

for

the

prevention

of

irregularities

and

fraud


Development

of

the

external

audit

areas

in

compliance

with

international

standards

11

NATIONAL PROGRAM(2003)
-
2



Economical,

effective

and

efficient

management

of

resources,



Prevention

of

irregularities

and

fraud


Gathering

timely

and

reliable

information


Concentration

of

the

control

and

audit

activities

on

the

most

risky

areas

determined

according

to

objective

risk

management

analyses



12

NATIONAL PROGRAM(2003)
-
3

As regards the institutional structure;


Establishment

of

Internal

Control

Harmonisation

Unit



Establishment

of

Internal

Audit

Coordination

Board


Implementation

of

systematic

and

comprehensive

training

programs

for

the

training

of

internal

auditors

and

those

who

are

involved

in

the

ex

ante

control

process


Establishment

of

a

computer

network

between

the

Board,

Ministry

of

Finance

and

the

Spending

Agencies,



Assigning

sufficient

number

of

internal

auditors

13

NATIONAL PROGRAM(2003)
-
4


As regards the external audit


Amendment

of

the

Law

on

Turkish

Court

of

Accounts


Improvement

of

the

external

auditing

standards


Strengthening

the

administrative

and

institutional

capacity


Utilization

of

Computer

Assisted

Audit

Techniques




14

KEY CONCEPTS OF THE NEW FINANCIAL
MANAGEMENT AND CONTROL SYSTEM


Managerial responsibility model


Effective, economical and efficient utilization of
resources


Strategic planning


Performance Based Budgeting


Multi
-
year Budgeting


Accountability


Fiscal Transparency


Accrual Based Accounting


Internal Control System


Efficient Internal Audit


Broad
-
scope external audit

15

NEW REGULATIONS IN THE PUBLIC
FINANCIAL MANAGEMENT SYSTEM


Law

on

the

regulation

of

Public

Financing

and

Debt

Management,

No

4749


Public

Procurement

Law,

No

4734


Public

Procurement

Contracts

Law,

No

4735


Public

Financial

Management

and

Control

Law,

No

5018


Budget

Coding

Structure


Accounting

System


Special

Revenue

and

Special

Appropriation

Law

No

5217


Turkish Court of Accounts Draft Law


Personnel Draft Law



16

PUBLIC FINANCIAL MANAGEMENT AND CONTROL LAW


Scope of the financial management and the budget has been
enlarged


Accountability

and

fiscal

transparency

is

achieved


The

principle

of

effective,

economical

and

efficient

utilization

of

the

resources

is

introduced


Initiative

of

the

administrations

is

increased


Strategic

planning

and

Performance

based

budgeting

is

introduced


Multi
-
year

budgeting

is

introduced

within

the

framework

of

medium

term

expenditure

framework


Unity

of

Accounting

in

the

public

sector

is

ensured

and

publication

of

the

fiscal

statistics

is

foreseen


Internal

Control

System

is

established


Internal

audit

system

is

established


Auditing

scope

of

the

Turkish

Court

of

Accounts

has

been

widened


17

SCOPE OF THE FINANCIAL MANAGEMENT
AND BUDGET HAS BEEN WIDENED



Instead

of

a

general

and

annexed

budget,

a

central

government

budget,

which

covers

the

administrations

within

the

scope

of

the

general

and

special

budget

and

the

budgets

of

regulatory

and

supervisory

agencies,

will

be

prepared


Public

administrations

within

the

scope

of

the

general

government

will

be

subject

to

the

same

financial

management

and

control

system


Budgets

will

be

prepared

on

a

three
-
year

basis


All

the

revenues

and

expenditures

of

the

administrations

will

be

stated

in

their

budgets


18

SCOPE OF THE LAW ACCORDING TO
ADMINISTRATIONS

GENERAL GOVERNMENT



SOCIAL SECURITY

CENTRAL GOVERNMENT LOCAL ADMINISTRATIONS



INSTITUTIONS







GENERAL BUDGET

SPECIAL BUDGET

REGULATORY AND






SUPERVISORY AGENCIES







19

SCOPE OF THE LAW ACCORDING TO
DUTIES AND TRANSACTIONS


Structure and functioning of the public financial
management


Preparation

and

implementation

of

the

public

budgets


Accounting and reporting of all the financial
transactions


Financial control

20

STRATEGIC PLANNING AND
PERFORMANCE BASED BUDGETING


Strategic

Plan

Preparation

Guide

(SPO)


Performance

Based

Budgeting

Guide

(Ministry

of

Finance)


Budgets

based

on

strategic

plans


The

compliance

of

the

budgets

with

the

missions,

visions

and

strategic

goals

in

the

strategic

plans


Evaluation

of

the

budgets

in

accordance

with

the

performance

indicators


Conduction

of

the

performance

audits

within

the

framework

of

these

indicators


Reporting



21

MULTI
-
YEAR BUDGETING


Preparation

of

medium
-
term

program


Preparation

of

medium
-
term

fiscal

plan


Strategic

plans

to

be

prepared

by

the

administrations


Preparation

of

three
-
year

budgets

by

the

administrations

which

will

cover

the

revenue

and

expenditure

estimates

for

the

current

year

and

following

two

years


Accordingly,

the

relation

between

the

planning

and

budgeting

is

established

within

the

framework

of

medium

term

expenditure

program
.



22

ACCOUNTING UNITY AND FISCAL
STATISTICS


Accounting

unity

is

being

ensured
.

The

same

accounting

system

shall

be

used

in

the

administrations

within

the

scope

of

general

government
.

Consolidation

and

international

comparison

of

all

the

accounts

shall

be

made

possible
.



The

Board

to

be

formed

under

the

Ministry

of

Finance

shall

determine

the

accounting

and

reporting

standards,

framework

Chart

of

Account

and

the

format,

period

and

type

of

the

reports

to

be

issued

that

will

be

applied

by

the

administrations

within

the

scope

of

general

government
.


Preparation

and

publicly

announcement

of

the

fiscal

statistics

with

regard

to

public

finance

is

foreseen
.


23

EU STANDARDS FOR THE FISCAL
CONTROL SYSTEM REFORMS

1.
A law which defines the financial control process

2.
Purposeful internal control system and methods


-
Accounting and Reporting Standards, and the
Policy Document


-
Automation Based Accounting


-
Mechanism for the auditing of the funds


-
Ex ante control over the Payments and
Commitments


-
Procurement control system


-
Control of the public revenues

3.
Functionally independent internal audit

4.
A mechanism to prevent irregularities and fraud




24

INTERNAL CONTROL SYSTEM


Internal

Control

:

is

the

entirety

of

institutional

structure,

method,

operational

processes

and

tools

which

enable

the

conformity

with

the

budget

and

rules

in

effect,

assurance

of

the

assets,

assurance

of

the

validity

and

accuracy

of

accounting

records

and

facilitation

of

managerial

decisions

through

making

fiscal

information

available

to

be

used
.



Internal

Control

Central

Harmonization

Task

shall

be

carried

out

by

the

Ministry

of

Finance
.



Establishment

of

an

efficient

internal

control

system

shall

be

on

the

account

of

the

administrations
.



25

ORGANIZATIONAL STRUCTURE OF THE FINANCIAL
MANAGEMENT AND CONTROL SYSTEM IN
COMPLIANCE WITH THE EU

MINISTRY OF FINANCE



INTERNAL AUDIT




INTERNAL CONTROL

Internal Audit Coor.

Board


Central Harmonization Unit


Central Harmonization Unit








PUBLIC ADMINISTRATION





INTERNAL AUDIT UNIT


FINANCIAL SERVICES UNIT

26

INTERNAL CONTROL SYSTEM


The Internal Audit Coordination Board has
been established.

Following issues have been planned:


Performing audits as risk
-
based


Employment of internal auditors as affiliated to
the head of public administration


Certificated internal auditors



systematic and continuous audit in accordance
with the internal audit standards



27

AUDIT OF THE COURT OF ACCOUNTS


Ex

ante

control

function

of

the

Court

of

Accounts

has

been

abolished
.



The

scope

of

the

audit

of

the

Court

of

Accounts

has

been

expanded
.

Central

government

administrations,

social

security

institutions

and

local

administrations

within

the

scope

of

general

government

shall

be

audited

by

the

Court

of

Accounts
.



28

IMPORTANCE OF THE FINANCIAL
SERVICES UNIT IN THE SYSTEM


Increasing

financial

tasks,

authority

and

responsibilities

of

the

public

administrations

shall

be

carried

out

by

the

financial

services

units

of

the

administrations
.



Conduction

of

the

financial

management

and

control

tasks

within

the

administration

in

a

sound

manner

is

dependent

on

the

organizational

structure

and

capacity

of

this

unit
.



This

unit

assumes

some

important

functions

on

the

issues

such

as

effective

use

of

public

resources,

prevention

of

irregularity

and

corruption,

prevention

of

the

mistakes

arising

from

the

lack

of

information,

assurance

of

accountability,

fiscal

transparency

and

providing

information

to

public

opinion
.


These

functions

entail

a

sound

financial

services

unit

which

is

directly

affiliated

to

the

head

of

public

administration
.


29

EX

ANTE CONTROL
-
1


The

article

58

of

the

Law

No

5018

regulates

the

task

of

ex

ante

control

and

the

article

59

regulates

the

qualifications

and

appointment

of

financial

control

officer
.

30

EX ANTE CONTROL
-
2


Ex

ante

control

process

is

set

out

in

the

scope

of

the

Law

in

a

way

to

cover

the

following
:


allocating

appropriations


undertaking

commitments



holding

tenders

and

concluding

contracts


receiving

goods

or

services


carrying

out

works



issuing

payment

orders


similar

financial

decisions

to

be

taken

by

the

authorizing

officer



The

ex

ante

control

task

shall

be

assumed

by

the

financial

control

officers

who

are

appointed

by

the

head

of

public

administration

and

directly

affiliated

to

him
.

However,

in

the

decentralized

units

of

the

public

administrations

within

the

scope

of

general

budget,

this

task

shall

be

carried

out

by

provincial

treasurers
.


31

EX ANTE CONTROL
-
3


Ex

ante

control

mechanism

foreseen

by

the

Law

is

based

on

the

principle

that

compliance

audit

should

be

performed

before

the

payment

by

a

certificated

financial

control

officer

at

various

stages

of

the

spending

process
.



Financial

control

officer

who

will

take

part

at

the

different

stages

of

the

spending

process

shall

control

the

compliance

of

the

transactions

with

the

legislation

and

thereupon

shall

grant

visa

or

positive

opinion
.



In

the

event

that

the

transactions

not

visaed

or

not

approved

are

realized,

the

authorizing

officer

shall

be

deemed

to

have

assumed

personal

responsibility
.


32

EX ANTE CONTROL
-
4


Ex

ante

control

mechanism

foreseen

by

the

Law

is

based

on

the

principle

that

compliance

audit

should

be

performed

before

the

payment

by

a

certificated

financial

control

officer

at

various

stages

of

the

spending

process
.



Financial

control

officer

who

will

take

part

at

the

different

stages

of

the

spending

process

shall

control

the

compliance

of

the

transactions

with

the

legislation

and

thereupon

shall

grant

visa

or

positive

opinion
.



In

the

event

that

the

transactions

not

visaed

or

not

approved

are

realized,

the

authorizing

officer

shall

be

deemed

to

have

assumed

personal

responsibility
.


33

AUTHORITY
-
RESPONSIBILITY


Political and managerial authority and
responsibilities have been separated.


Authorities


of the process :


The Minister


Head of public administration


Authorizing officer


Director of financial services unit


Financial control officers


Realization officers


Accounting officers


Internal auditors

34

AUTHORITIES IN THE
MANAGEMENT AND CONTROL
PROCESS
-
1


THE MINISTER is politically responsible
for:


Implementation of government policies


Preparation and implementation of the
budgets


Coordination and cooperation with other
ministries


Utilization of the resources


Providing information to public opinion

35

AUTHORITIES IN THE MANAGEMENT AND
CONTROL PROCESS
-
2


Head of public administration:

is responsible for the budget of
the public administration.


Head of public administration is responsible for:



Preparing and implementing the strategic plans and
budgets of the administrations


Ensuring that the resources are provided and utilized in an
effective, economical and efficient way


Supervising and monitoring the operation of the financial
management and control system


Fulfilling the task and responsibility set out in the Law
towards the Minister; towards
their local councils in local
administrations.




36

AUTHORITIES IN THE MANAGEMENT AND
CONTROL PROCESS
-
3


Authorizing Officers
: Head of each spending unit
to which appropriation is allocated with the budget
is the authorizing officer.


The

authorizing

officer

grants

spending

instruction

and

signs

the

payment

order
.



Authorizing

Officers

are

responsible

for
:



the

compliance

of

spending

instructions

with

the

budget

principles

and

basics,


the

compliance

of

spending

instructions

with

the

other

laws,

by
-
laws

and

regulations


Utilization

of

appropriations

in

an

effective,

economical

and

efficient

manner

37

AUTHORITIES IN THE MANAGEMENT
AND CONTROL PROCESS
-
4



Director

of

financial

services

unit


Financial

Services

Unit

carries

out

the

tasks

such

as
:



Preparing

the

budget

of

the

public

administration


Preparing

the

budget

estimates

for

the

following

two

years


Keeping

the

budget

records


Issuing

the

appropriation

dispatch

documents


Compiling

and

reporting

the

data

related

to

the

budget

implementation

results


Carrying

out

the

financial

transactions

on

making

expenditures

and

collecting

revenues


Preparing

the

Final

Account

38

AUTHORITIES IN THE MANAGEMENT AND
CONTROL PROCESS
-
5


Financial

Control

Officer

:





Grants

visa

or

positive

opinion

on

the

spending

decisions

upon

a

preliminary

control



The

decisions

and

transactions

to

be

subjected

to

visa

or

positive

opinion

are

determined

by

the

Ministry

of

Finance
.




Financial

Control

Officers

are

responsible

for

the

visas

and

positive

opinions

which

they

have

granted
.


39

AUTHORITIES IN THE
MANAGEMENT AND CONTROL
PROCESS
-
6


REALIZATION OFFICERS:



carry out the following duties


Doing or having the work done


Receiving goods or services


Completing the receiving formalities


Documenting the transactions


Issuing necessary documents for payment



40

AUTHORITIES IN THE MANAGEMENT
AND CONTROL PROCESS
-
7


Accounting

Officer
:


At

the

payment

stage,

controls

the

following

aspects

in

the

payment

order

document

and

its

appendices
:



Signature

of

the

authorized

persons


The

completeness

of

the

documents

listed

in

the

regulations

pertaining

to

payment


The

existence

of

any

material

error


The

information

on

the

identity

of

the

rightful

person




realizes

the

payment

and

keeps

accounting

records
.