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Budget Code's adoption to improve fiscal controls in Azerbaijan

13 November 2015 10:00 (UTC+04:00)
Budget Code's adoption to improve fiscal controls in Azerbaijan

By Aynur Karimova

The adoption of the Budget Code in Azerbaijan will make a positive contribution to improving the efficiency and transparency of fiscal controls, said Vugar Gulmammadov, the Chairman of the Accounting Chamber of Azerbaijan.

He told Trend that the efficient and effective use of budget funds is one of the major fiscal requirements of a modern country.

"Proper planning and efficient use of state budget expenditures needs the improving of the regulatory framework. Improvements of existing legislation, regulating state fiscal control and the financial-budgetary system and combining them into a single code, will pave the way for resolving the problems in both directions and improving activities," he said.

Gulmammadov also noted that the combination in the Code of the legal framework that regulates broad aspects of activity is the most widespread approach, and a characteristic in the upper stages of development.

"The country has nearly 20 codes, which provide a successful, coherent and responsive multi-faceted activity in the relevant sphere. In this regard, the adoption of the Budget Code will provide a single regulation in the form of a single complex of budget processes and systems of controls over operations," he added.

According to Gulmammadov, the purpose of fiscal controls is to ensure the effective and economical use of state funds, or the rational use of existing resources.

"To achieve these goals, the Budget Code provides the separation of duties between supervisory authorities and determines which body and what methods could be used. The code forms an integrated and systematic approach to budget planning, its development and fulfillment, at the same time, by regulating the control of its implementation," Gulmammadov noted.

Accounting Chamber develops new law

Gulmammadov went on to add that Azerbaijan's Accounting Chamber has developed a primary draft of classification of violations in the field of fiscal controls.

"The creation of a classification is the first and important step towards systematizing the activities of bodies of fiscal control and improving the efficiency of state audits," he noted.

He believes this will provide a systematic approach to violations of financial regulations.

"As a result, the bodies conducting [fiscal] control will work more consistently. Meanwhile, the creation of classifications of violations will decrease the number of incidences of disagreement [of regulatory bodies] with the controlling bodies," Gulmammadov said.

In general, Gulmammadov believes that Azerbaijan needs to form comprehensive legislation that will regulate the activities of public authorities engaged in fiscal controls. In this regard, the Accounting Chamber has developed a draft law.

"The solution of many problems in this sphere depends on improving the legal framework. There are a number of approaches in practices worldwide. For example, the Parliament of Kazakhstan has recently passed a law entitled, "On the state audit and fiscal control." This law regulates the system of control of budget funds, including the basic principles of state audits, methods used in this field, third-party and internal control mechanisms, and more. The law reflects the specific provisions on the criteria for the control system," he added.

In this regard, it is important to increase transparency and objectivity of the activity of regulatory bodies, to enhance cooperation of regulatory authorities and public bodies that are subject to control.


Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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