The Milli Majlis (Parliament) of the Republic of Azerbaijan held its regular plenary session on December 16, 2016. One of the issues included to the agenda was the discussion of relevant changes made to the Law of the Republic of Azerbaijan ‘On budget system’ presented by Parliament with the legislative initiative of the President of the Republic of Azerbaijan Ilham Aliyev.
The draft law presented to the discussion reflected some important provisions on improving the control mechanisms with regard to the formation, approval, execution of budget system in the Republic of Azerbaijan.
One of the above mentioned issues was the execution of the functions of the Chamber of Accounts of the Republic of Azerbaijan – as the Supreme Audit Institution carrying out the external public financial control in the Republic in accordance with the Laws of the Republic of Azerbaijan ‘On the Chamber of Accounts’ and ‘On the Budget system’, and ‘The Internal Regulation of the Chamber of Accounts of the Republic of Azerbaijan’ approved by the Law of the Republic of Azerbaijan, numbered 269-IIQ, dated March 5, 2002.
So, the draft comprised the norms with regard to obtaining information on providing effective control mechanism on effective execution of rights and powers of the Chamber, and the public funds including the revenues and expenditures of state budget and extra budgetary funds. All the above said plays special role in implementation of the Chamber’s activity.
Actually rendering opinion on draft budgets of state budget and extra budgetary funds and reports on execution is one of the main activity directions of the Chamber of Accounts. However, unlike the Law of the Republic of Azerbaijan ‘On the Chamber of Accounts’ and the Internal Regulation of the Chamber of Accounts in the Law of the Republic of Azerbaijan ‘On Budget system’ which defines the budget system formation, budget drafting, approval, execution and control on their execution, as well as organizational, legal and economic bases, also the main principles of mutual relations of state budget with extra budgetary funds and the local budgets, such procedures were not defined as presenting Chamber’s opinion to draft state budget and draft budget of extra budgetary state funds, presenting information on execution of revenues and expenditures and the amendments concerning revenue and expenditure division of the state budget within the state budget execution process by the state bodies providing the execution of state budget revenues and expenditures (Generally, the issue of presenting opinion on drafts was not regulated in the Law ‘On Budget system’).
In addition, the new draft defines the relevant norms with regard to eliminating these gaps and assigning powers to the Chamber in formation of data base and this envisages ensuring the effective public control on state funds.
As due to the draft law the state budget draft and consolidated budget draft for next budgeting year and the indicators of consolidated budget for the next 3 years will be presented to the Chamber of Accounts together with the relevant executive power Office till September 15. In addition, following the publication of the state budget the classification of state budget revenues and expenditures (in the level of functional, economic and administrative) will be presented to the Chamber of Accounts by relevant executive power Office.
Due to other amendments the bodies ensuring the execution of state budget revenues, also the regional and local branches in accordance with forms agreed with relevant executive power offices are envisaged to present the monthly, quarterly and growing up results since year beginning reports on functional, economic and administrative classification to the Chamber on classification revenues monthly, quarterly and growing up results since year beginning and use of funds by organizations receiving financial aids from budget organizations and state budget.
Due to the draft document, in case of any amendment to the revenues division of the state budget in the process of state budget execution and expenditures division on functional, economic and administrative classification the information should be presented to the Chamber of Accounts by relevant executive power office.
The other part of the amendments include the issues as presenting monthly and quarterly reports on state budget execution as defined by law till the 25th of the month following the reporting month and till the end of the first month of the next quarter.
In addition, it also envisages presenting the annual report on state budget execution and relevant draft law till the 25th of April of the next year by the appropriate executive power office to the Chamber of Accounts together with relevant state organization.
The approval of the law as the final step will formulate the effective state financial control in compliance with ISSAIs and leading international practice.
At the same time, the presented proposals are the important steps towards the implementation of the activity of the Chamber of Accounts as the SAI in compliance with UN General Assembly Resolution A/66/209 on "Promoting the efficiency, accountability, effectiveness and transparency of public administration by strengthening Supreme Audit Institutions" on 22 December 2011 and UN General Assembly a Resolution A/RES/69/228 on “Promoting and fostering the efficiency, accountability, effectiveness and transparency of public administration by strengthening supreme audit institutions” on 19 December 2014.