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RESOLUTION OF COUNCIL OF MINISTERS OF THE REPUBLIC OF BELARUS

of February 9, 2019 No. 82

About reforming of national system of financial accounting and the reporting of the sector of public administration

For the purpose of improvement of quality and transparency of information on financial position and results of organization activity of the sector of public administration the Council of Ministers of the Republic of Belarus DECIDES:

Approve:

the concept of reforming of national system of financial accounting and the reporting of the sector of public administration (is attached);

the plan of the main actions for implementation of the concept of reforming of national system of financial accounting and the reporting of the sector of public administration (is attached).

Prime Minister of the Republic of Belarus

S. Rumas

Approved by the Resolution of Council of Ministers of the Republic of Belarus of February 9, 2019 No. 82

Concept of reforming of national system of financial accounting and reporting of the sector of public administration

Chapter 1 General provisions

This concept is developed in development of strategy of reforming of management system by public finances of the Republic of Belarus determined by the resolution of Council of Ministers of the Republic of Belarus of December 23, 2015 No. 1080 "About reforming of management system public finances of the Republic of Belarus".

In this concept the purpose of reforming of national system of financial accounting and the reporting of the sector of public administration, the approaches, the directions and the main actions assumed to realization and also expected results of reform are determined.

Chapter 2 Current status of national system of financial accounting and reporting of the sector of public administration

Now legal and methodological basis of financial accounting and the reporting, including for the organizations of the sector of public administration, are determined by the Law of the Republic of Belarus of July 12, 2013 No. 57-Z "About financial accounting and the reporting", and also number of regulatory legal acts of the Ministry of Finance and other state bodies.

Tough control of compliance with law is characteristic of the existing system of financial accounting that promotes maintenance of high level of financial discipline.

However, despite consecutive and strict observance of the national legal system, up to standard it is not provided by state bodies of all necessary information. In particular, information on assets and liabilities, financial results of activities of the sector of public administration, efficiency of use of public funds is limited.

In many respects various requirements to financial accounting and forming of the reporting for the organizations of the sector of public administration are the reason for that.

One of the main problem aspects - plurality of charts of accounts of financial accounting. So, now the organizations of the sector of public administration use four various charts of accounts - state-financed organizations, bodies of the State Treasury, local financial bodies, executive committees rural, settlement, city (the cities of district subordination) Councils of deputies.

Reflection of information in financial accounting with use of various charts of accounts significantly complicates reconciliation of data between the organizations of the sector of public administration, and also interferes with the automated data collection and forming of the consolidated accounting records.

Along with the existing charts of accounts of financial accounting for the purpose of reflection of transactions on execution of budgets for cash method budget classification according to the resolution of the Ministry of Finance of the Republic of Belarus of December 31, 2008 No. 208 "About budget classification of the Republic of Belarus" is used.

Lack of integration between charts of accounts and budget classification attracts need of record of the same transaction by the accountant with use of two codes which are not connected among themselves (by the corresponding chart of accounts and on budget classification). The interrelation of accounts of financial accounting with codes of budget classification is not determined. Often it results in impossibility of automatic receipt of information of financial accounting on the available assets (inventories, fixed assets and to that similar) with disaggregation on budget classification. Respectively use of accounting data for previous year as basis for planning of the budget for the forthcoming period is complicated and requires set of manual transactions. Application separately of charts of accounts of financial accounting and budget classification interferes with ensuring interrelation between processes of financial accounting and budgetary planning.

At the same time in the international practice the best results are achieved in case of integration of financial accounting and budget classification.

One more problem aspect of national system of financial accounting and the reporting of the sector of public administration is application of various methodological rules and the principles of financial accounting by state-financed organizations, local financial bodies and bodies of the State Treasury.

So, one of the basic principles of financial accounting and the reporting of state-financed organizations according to Item 1 of article 3 of the Law of the Republic of Belarus "About financial accounting and the reporting" is the accrual basis according to which economic activities are reflected in financial accounting and the reporting in that accounting period in which they are made, irrespective of date of calculations for them. At the same time bodies of the State Treasury and local financial bodies keep financial accounting of execution of budgets on the basis of cash method with separate elements of charges. Requirements to the accounting records created by them are also not unified. Besides, the methodology of financial accounting of state-financed organizations existing now does not provide application of accrual method at the level corresponding to the international practice.

As a result there is no possibility of forming of the single consolidated statements reflecting the amount of financial and non-financial assets and liabilities, total amount of imputed incomes and expenses at the expense of all sources at the level of the relevant budget and the state in general.

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