State financial control: important issues of methodology

Abstract

The system of state financial control (SFC) will be effective and efficient once built on the adequate methodological background that lays the fundament for the controlling actions. Therefore, the methodological background, once subject to continual monitoring, allows for proper identification of problematic matters and making the required corrections. The purpose of the study is in making an extensive analysis of the methodological background and elaborating recommendations on its improvement.

The analysis of the current methodological framework for SFC in Ukraine shows its incompleteness (as it does not cover all its varieties, phases, forms), imperfectness and inefficiency, which affects its efficiency and effectiveness. A detailed analysis of methodological framework for state financial control SFC in Ukraine is made. A number of methodological shortcomings are found, related with lack of methodological tools tailored to the needs of rapid quantitative and qualitative assessment of the effectiveness of the use of funds, lack of reasonable criteria and performance indicators for assessment purposes. It is argued that further steps to improve the system of risk-based audits according to European practices need to be taken in Ukraine, to minimize interference in the business of honest tax payers. The contradictions between the required and the existing quality of methodological framework for cooperation between customs and tax authorities are investigated. Disadvantages inherent in methodological approaches to post-custom control are shown.

It is concluded that the diversity and inconsistency of methodologies backing operation of various SEC offices in Ukraine, apart from entailing distinct approaches to performing audits and interpretations of the revealed fazes in the budget process and public assets exploitation, prevents from building an integrated and efficient SFC system in Ukraine.