of January 16, 2007 No. 34
About approval of Strategy of upgrade of system of financial accounting in public sector for 2007-2015
The Cabinet of Ministers of Ukraine decides:
Approve the Strategy of upgrade of system of financial accounting in public sector for 2007-2015 which is applied.
Prime Minister of Ukraine V. Yanukovych
Approved by the Resolution of the Cabinet of Ministers of Ukraine of January 16, 2007 No. 34
The cooperation of Ukraine with the international organizations, financial institutions, activities in the exchange stock and investment markets need openness and transparency of information on economic problems, in particular concerning financial accounting, compliance to international standards. Subjects of financial accounting in public sector is the Ministry of Finance which provides carrying out state policy in the sphere of financial accounting, managers of budgetary funds, Treasury and funds of obligatory national social and pension insurance which provide financial accounting.
At present financial accounting in the budget sphere consists of financial accounting of accomplishment state and local budgets and financial accounting of budgetary institutions.
According to the Budget code of Ukraine and the Law of Ukraine "About financial accounting and the financial reporting in Ukraine" the procedure for financial accounting and financial reporting preparation, the reporting on accomplishment of budgets, estimates of budgetary institutions establishes the Ministry of Finance.
Financial accounting of accomplishment state and local budgets is conducted by bodies of Treasury, and financial accounting of accomplishment of estimates of budgetary institutions - managers of budgetary funds.
Besides, funds of obligatory national social and pension insurance apply different techniques of financial accounting.
The legislation accurately does not determine methods of financial accounting in public sector.
Financial accounting of accomplishment state and local budgets is conducted on cash method using accrual method on separate transactions (accounting of public debt, obligations of managers of budgetary funds). Transactions according to the income, expenses are displayed in financial accounting at the time of carrying out the corresponding payments, and transaction on financing of the budget - at the time of transfer of means with simultaneous display of debt.
Financial accounting in budgetary institutions and funds of obligatory national social and pension insurance is conducted on accrual method on which transactions and events are recognized at the time of their origin, irrespective of receipt date or payment of means (or their equivalents).
Besides, the Treasury constitutes the reporting on accomplishment of the government budget based on information on cash transactions which are displayed in its system of financial accounting and the reporting of managers of budgetary funds concerning which treasurer servicing is not performed (on separate the directions of expenses the MFA, secret expenses and expenses connected with accomplishment of joint projects with international financial institutions).
The reporting on accomplishment of budgets is consolidated by Treasury and the main managers of budgetary funds in parallel that leads to increase in budget expenses for information processing.
Due to availability of various organizational structures of accounting services, procedures of document flow, use of various software, and in some cases the need to enhance the organization of financial accounting of managers of budgetary funds arose lack of such providing. The question of enhancement of procedure for evaluating assets is urgent. Changes which happened within 10 last years in cost limits of transfer of assets in structure of fixed assets and also in standard rates of charge of depreciation of fixed assets, entailed to not display of fair value of fixed assets in financial accounting.
Purpose and tasks of Strategy
The purpose of this Strategy is enhancement of system of financial accounting in public sector taking into account requirements of international standards.
Tasks of Strategy are enhancement of methodology and transition to unified methodological bases of the financial accounting and the reporting, and also creation unified organizational and information ensuring financial accounting.
Upgrade of system of financial accounting will promote enhancement:
managements of public finances;
systems of strategic budgetary planning for the medium-term and long-term periods;
procedure for creation and accomplishment of the budget on the basis of program and target method in the budget process;
control systems behind process of accomplishment of the budget;
information and analytical management system public finances.
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