Last week, the team of the Regional Office of U-LEAD with Europe in the Zaporizhzhia Oblast held a joint event with representatives of the local Department of the East Office of the State Audit Service on “State Financial Control as a Tool for Ensuring Timely and Effective Fundraising, Increased Funding, New Income Sources and Rational Use of Funds”. 60 officials from 28 municipalities of the oblast joined the event.
“We’ve received many requests from municipalities regarding inspections and audits. That is why we decided to hold an event focusing on the types of state control and the specific aspects of procurement monitoring, as well as the methods of preventing local budget violations related to expenditures,” said Anastasiia Pavliuk, Adviser on Municipal Management and Recovery of the Regional Office of U-LEAD in the Zaporizhzhia Oblast.
Speakers explained the priorities for the main tasks and functions of the state financial control body, explained the types of state financial control, specific aspects of planning, conducting and implementing inspections, talked about the theory and practice of preventing budget offences when the planning and implementation of the expenditures of local budgets. They also stressed that inspection plans are posted quarterly on the institution’s official website.
“I do hope that this cooperation will yield great results. Today we explained existing gaps, errors and violations in the activities of local self-government. Inspections rarely go without negative feedback. The objective of the inspection is to identify and correct errors so that they are taken into account when going forward and not repeated,” said Alla Mamonova, Deputy Head of the East Office of the State Audit Service in the Zaporizhzhia Oblast.
The speaker highlighted the documents that auditors are guided by during inspections and explained the grounds for inspecting an entity:
“Our personnel does a painstaking job to provide grounds for the inspection. Appeals from law enforcement agencies, complaints from people’s deputies of various levels, etc., can also lead to one.”
The inspection verifies the legality of receiving and using funds from the local budget.
Following the inspection, a report is issued to offer recommendations for eliminating deficiencies and errors. Detected violations give rise to liability. Furthermore, information about the results of the inspection is forwarded to law enforcement agencies.
Viktor Borodin, Deputy Head of this same East Office, told the participants of the info session about “some specific aspects” of local budget expenditures and at what stage risks of violations arise:
“A successful municipality is one that legally and efficiently spends money and satisfies people with quality services. It all begins with planning — a starting point for the local budget expenditures. Evidence suggests that local self-government bodies are not always guided by applicable laws and regulations in their activities.”
As Mr Borodin added, there are risks at every stage, including unsubstantiated planning of expenditures, faulty planning of activities, uncoordinated actions of the local financial body, systematic violations of business contracts, errors in determining the cost of works and services, etc.
Procurement monitoring is an unplanned inspection. This is a systemic process, and if scheduled monitoring of the electronic procurement system reveals any violation, local self-government bodies are informed about the inspection. This was stated by Valerii Holub, Head of the Procurement Control Department of the East Office of the State Audit Service in the Zaporizhzhia Oblast. He presented case studies of violations and their consequences. The most common ones were the overestimation of the cost of works and services and inconsistencies in the procedure.
At the end of the event, the representatives of the East Office of the State Audit Service provided a summary, answered the questions, pointed out the legal framework and called for a more responsible attitude and better awareness among the primary administrators of funds.