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05 April, 2017

The corruption risks in the sphere of state audit and financial control have been identified by the Agency for Civil Service Affairs and Anti-corruption

As a result of the analysis, the Agency identified serious corruption risks in the sphere of state audit and financial control. Monitoring showed that the manifestation of corruption in the activities of the controlling bodies substantially reduces effectiveness, and consequently, negatively affects on successful realization of the State's strategic goals.

  For example, in December last year, the main state auditors of the Account Committee B. Kopobayeva and A. Zhangirbayeva were convicted in receiving a part of a bribe in amount of 16 million KZT during the scheduled inspection from the executives of RSE “Kazakhavtodor” for not displaying identified violation of inappropriate use of budget funds in their report.

  The chairman of the Visiting Republican Commission of the Committee on Financial Control of the Ministry of Finance K. Turekhozhayev was sentenced for 10 years of imprisonment in Karaganda oblast, for not including revealed violations in the act of inspection and receiving a bribe in amount of 4.6 million KZT via another commission member M. Mamenov from the public officials of Regional Department of Culture and Sport during the inspection of state bodies in Karaganda city.

Similar crimes were suppressed in Aqmola, Almaty, Atyrau, Mangystau, Zhambyl, Kyzylorda oblasts. The analysis revealed several reasons and conditions which lead to corruption offenses in this sphere.

  First, it is the imperfection of the system of state audit bodies.

Today it consists of four elements (the Accounts Committee, local Audit Commissions, Committee of Internal Audit of the Ministry of Finance and its territorial departments, internal audit services in central and local executive bodies).

Independent state audit bodies in the existing system largely duplicate each other.

As a result, state institutions and organizations are often being inspected.

   Secondly, the presence of discretionary norms in normative legal acts that promotes the development of corruption.  

Thus, the auditors receive a wide range of power during the inspections; they can independently make changes to the approved list of objects of the state audit; to exclude or substantially extend inspected objects; extend the deadline of state audit.

Moreover, they are authorized to make changes and additions to the audit plan, program and audit tasks during the inspections.

All this undoubtedly creates corruption risks in the activities of controlling bodies.

Thirdly, direct contact of auditors with officials of inspected objects.

One of the main causes of corruption during the inspections  of state audit bodies is a 'contact' between the auditor and audited entity.

Often for the purpose of concealing any discovered violations inspectors take bribes for a positive solution of the problem.

In this context, taking into account the experience of leading countries (Germany, France, Canada) we should refuse from state audit directly at the object and go totally to electronic state audit.

Fourthly, the opacity of controlling bodies.

Another problem of state audit and financial control is their opacity.

Selective monitoring of Internet resources of state audit bodies detected a number of problems in work at this direction.

So, on the websites of the Accounts Committee and audit committees of Astana and Almaty cities, Karaganda and Zhambyl oblasts there are no audit reports, audit opinions and internal audit reports.

Moreover, the Committee of Internal Audit of the Ministry of Finance and its territorial departments have no websites at all.

In General, inspection bodies post only press releases, plans and brief information about the work.

All this indicates a lack of openness and transparency in the activities of controlling bodies.

In order to avoid conditions for corruption in this field, it is proposed to:

review existing system of state audit and financial control bodies with the exception of duplicate links;

– automate all processes of state audit and financial control with transition to electronic format in order to eliminate the direct contact;

– make appropriate amendments and additions to the normative legal acts governing activities of controlling bodies, based on identified corruption and discretionary norms;

authorized bodies in the sphere of budget control in accordance with Law On Counteraction of Corruption to conduct an internal analysis of corruption risks in normative legal acts, organizational and management activities;

oblige state audit and financial control bodies in order to implement the principle of transparency and access to information (the Law On Access to Information, Article 4), to publish complete reports on their activities including ongoing audits and their results in media and on their websites (audit reports, audit opinions and internal audit reports);

for the prevention of corruption, considering the experience of leading foreign countries (USA, UK), create a Rating of the State Auditors' Effectiveness with introduction of incentive mechanisms.

The Agency strongly recommends the Accounts Committee, the Ministry of Finance, Audit Commissions to take measures on elimination of identified corruption risks and strengthen efforts to prevent corruption in their own ranks.