Major Objectives of Internal Audit Strategy Development in Belarus

2nd Internal auditors’ Community of Practice WorkshopChisinau, Moldova

June 20-22 2007

Lilia Guzova, Audit DepartmentVictor Burlo, Control and Revision Unit

REPUBLIC OF BELARUS

Bodies Responsible for Public Financial Control in the Republic of Belarus

Extradepartmental Extradepartmental Financial ControlFinancial Control

Public Control Public Control Committee in the Committee in the

Republic of BelarusRepublic of Belarus

Departmental Departmental Financial ControlFinancial Control

Public Control Public Control Committees in Committees in

Oblasts and city of Oblasts and city of MinskMinsk

Ministry of FinanceMinistry of Finance

Ministry of EconomyMinistry of Economy

MinistriesMinistries

Other republican public Other republican public authoritiesauthorities

State organizationsState organizations

Ministry of Taxes and Ministry of Taxes and ChargesCharges

Ministry of Labor and Social Ministry of Labor and Social ProtectionProtection

National BankNational Bank

State Customs CommitteeState Customs Committee Local executive and discharge Local executive and discharge authoritiesauthorities

STRUCTURE OF CONTROL ACTIVITY COORDINATION BOARD

CONTROL ACTIVITY COORDINATION BOARD

IN THE REPUBLIC OF BELARUS

CONTROL ACTIVITY COORDINATION BOARDS

IN OBLASTS (CITY OF MINSK)

CONTROL ACTIVITY COORDINATION BOARDS IN DISTRICTS (CITIES

SUBORDINATED TO OBLAST CENTERS)

Role of the Control Activity Coordination Board in the Republic of Belarus

Assurance of enforcement of legislative acts when performing control activity; Development of action plan for control bodies including coordination plan for all

control activities; Organization of joint inspections (revisions) of financial and economic activity of

organizations (with participation of several controlling bodies); Coordination of activity of the controlling bodies engaged in the collection and

analysis of information in the sphere of control, exchange of respective data and creation of a single data base for data collected;

Assurance of effective implementation of decisions made on the basis of inspection (revisions) work;

Analysis of the control activity results and drafting proposals for public authorities and other organizations; including those responsible for the improvement of financial/economic legislation;

Organization of experience exchange in the sphere of control activity; Assurance of efficient training and career enhancement for staff of the control

bodies.

General Directorate for Budget Policy General Directorate for Industrial Sphere Finance General Directorate for Funding Public Authorities, Law Enforcement Bodies and Defense Agencies General Directorate for Fiscal Policy and Fiscal Revenues General Directorate for the Funding of Social Sphere and Science Directorates for Funding Emergency Activities and Construction Sector Finances Human Resources Department Directorate for Agricultural and Industrial Complex Finances Main control and revision Unit General Directorate for Regulating State Loans, Money and Credit Sphere General Directorate for Foreign Economic Relations and Foreign Debt Finances General Directorate for Insurance Supervision Directorate for Accounting and Reporting Methodology Main Department of the Treasury General Directorate for Precious metals and Precious Stones Directorate for Finances, Accounting and Reporting Department for Watermark and Thread Mark Papers Information Support Department State Inspection for Assay Supervision Legal Office Auditing Directorate Securities Department Directorate for Control, Office Work and Logistics

Structure of the Ministry of Finance

GENERAL DIRECTORATE

Treasury OfficeControl and revision unit

Branch offices of the General

Directorate in districts

Department for organizational, legal

and human resources issues

Department for funding and logistic

support

Information supportdepartment

Department for organization of the budget execution

Department for operations and

control Department for audits based on law enforcement bodies’

decisions

Departmental control office

Department for the revisions of

entrepreneurial activity entities

Sector (unit) for insurance

supervision

Securities department

Department for budget execution

accounting

Department for cash receipts

Structure of the General Directorate of the Ministry of Finance of the Republic of

Belarus (city of Minsk)

Department for financial control in the budget sphere

Department for revisions based on law enforcement bodies’

decisions

Reforms in Public Finance Management

►Transition to the new standards of financial data reporting;►Expansion of the budget execution coverage by the Treasury system:

● inclusion of all the local budgets from 2006● inclusion of extra-budgetary funds in the Treasury system:

- 5 extra-budgetary funds in 1998;- social protection fund in 2004;- innovation funds in 2005.

►Improvement of the reporting system and control of the use of “own resources” of budgetary institutions;

►Transition to the program budgeting (performance-based budgeting);►Transition to the multi-year budgeting (MTEF);►Tax reform.

Steps Necessary for the Internal Audit Strategy Development

To understand the need for changing the internal audit approach and organize awareness campaign so that specialists of all the levels could understand these concepts;

To identify those areas which are in most obvious need of reform;

To identify future approach to training and career development of specialists;

Develop a universal program for transition to international financial reporting standards for state agencies.

THANK YOU FOR YOUR ATTENTION!