NORMATIVE RESOLUTION OF CALCULATING COMMITTEE ON CONTROL OF EXECUTION OF THE REPUBLICAN BUDGET OF THE REPUBLIC OF KAZAKHSTAN

of November 28, 2015 No. 13-HK

About approval of Standard risk management system which is applied when forming the list of objects of the state audit and financial control for the corresponding year and carrying out external state audit

According to the subitem 11) of item 4 of article 12 of the Law of the Republic of Kazakhstan "About the state audit and financial control" the Highest auditor chamber of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Standard risk management system which is applied when forming the list of objects of the state audit and financial control for the corresponding year and carrying out external state audit.

2. Recognize invalid:

1) the normative resolution of Calculating committee of August 31, 2011 No. 3-NP "About approval of standard risk management system which is applied when planning and carrying out external state financial control" (registered in the Register of state registration of regulatory legal acts of September 26, 2011 No. 7205, published in the Kazakhstanskaya Pravda newspaper of October 15, 2011 No. 330-331 (26721-26722)).,

2) the normative resolution of Calculating committee of January 18, 2013 No. 1-NP "About modification of the normative resolution of Calculating committee on control of execution of the republican budget of August 31, 2011 No. 3-NP "About approval of Standard risk management system which is applied when planning and carrying out external state financial control" (registered in the Register of state registration of regulatory legal acts of February 15, 2013 No. 8338, published in the Kazakhstanskaya Pravda newspaper of March 27, 2013 No. 105-106 (27379-27380)).

3. To provide to legal department in the procedure established by the legislation:

1) state registration of this normative resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days after state registration of this normative resolution in the Ministry of Justice of the Republic of Kazakhstan its direction on official publication in periodic printing editions and in information system of law of Ad_let;

3) placement of this normative resolution on Internet resource of Calculating committee.

4. To impose control of execution of the normative resolution on the chief of staff of Calculating committee.

5. This normative resolution becomes effective after ten calendar days after day of its first official publication.

Approved by the normative Resolution of Calculating committee on control of execution of the republican budget of the Republic of Kazakhstan of November 28, 2015 No. 13-HK

Standard risk management system which is applied when forming the list of objects of the state audit and financial control for the corresponding year and carrying out external state audit

1. Basic provisions

1. This Standard risk management system which is applied when forming the list of objects of the state audit and financial control for the corresponding year and carrying out external state audit (further – Standard system) is developed according to the subitem 11) of item 4 of article 12 of the Law of the Republic of Kazakhstan "About the state audit and financial control" (further – the Law).

2. Main objectives of Standard system are:

1) identification of objects and objects of the state audit and financial control of the increased risk;

2) assistance to decrease in level of risks for achievement of strategic objectives and the purposes of activities of objects of audit;

3) the differentiated application of measures of risk minimization depending on risk degree.

3. When using Standard system the following basic concepts are applied:

1) response measures – complex of the actions accepted by bodies of the state audit directed to the prevention, minimization and elimination of risks;

2) objects of the state audit and financial control (further – objects of the state audit) – activities of state bodies, including management of public finances, the budget programs, concepts of development of the industry/sphere, national projects, development plans for state bodies, development plans for area, city of republican value, the capital;

3) objects of the state audit and financial control (further – objects of the state audit) – state bodies, public institutions, subjects of the quasi-public sector, and also receivers of budgetary funds;

4) risk – probability of non-compliance with budget and other legislation of the Republic of Kazakhstan, adverse effect of event or action on object and subject of the state audit which leads to financial violations, plunders (waste) of budgetary funds and drawing economic damage to the state, and also not achievement or non-execution in full of the target indicators and indicators provided in program documents and development plans for state bodies;

5) the summary risk register – the document representing ranging of objects and objects of the state audit of risk degrees and used in decision making process on response measures;

6) the risk register – the structured list is risk, criteria and the reasons of risks, probability of their origin, impact (damage), priority and response measures containing results of their qualitative and (or) quantitative analysis, also including;

7) risk management system – the complex of actions when forming the list of objects of the state audit and holding auditor actions by bodies of the state audit directed to identification, identification, assessment and risk analysis and their factors on the basis of reporting and other data, development and taking measures of reaction, monitoring of efficiency of results of the taken measures;

8) the risk assessment - includes determination on the basis of high-quality and (or) quantitative approaches of probability of approach of negative event and influence of consequences;

9) quantitative evaluation method of risk – the risks assessment based on statistical and mathematical instruments and technicians of data analysis and modeling;

10) the qualitative method of risk assessment – the risks assessment based on expert and analytical methods;

11) identification of risk – the analysis of all risk circumstances and possible risk circumstances and situations, for the purpose of identification of the reasons and signs of emergence of risks, determination of their criteria;

12) risk analysis – the action which is carried out for identification of the greatest probabilities of approach and influence of risk on this or that field of activity of object of the state audit;

13) monitoring is risk – accounting of objects and objects of the state audit of risk degree in dynamics for the subsequent analysis and efficiency evaluation of actions according to the prevention, minimization, elimination of risks objects of the state audit;

14) criteria – the list of indicators on the basis of which the decision on reference of subject and object of the state audit to certain risk degree is made.

4. The standard system is used when forming the list of objects of the state audit for the corresponding year, carrying out external state audit, the analysis and assessment of objects of the state audit.

5. The standard system is used by bodies of external state audit and financial control (further – bodies of external state audit) according to the assigned functions and powers at all levels of the budget:

at the republican level – the Highest auditor chamber of the Republic of Kazakhstan (further – the Highest auditor chamber);

at the local level – audit committees of areas, cities of republican value, the capital (further – audit committees).

2. Main stages of Standard system

Paragraph 1. Stages of risk management system

6. Risk management process includes the following stages:

Preliminary stage:

1) information collection for evaluating risks from the financial, budget, accounting records received from objects of the state audit and other sources;

2) systematization and forming of the database on objects of the state audit;

Main stage:

1) identification of risks and criteria of their selection;

2) risks assessment on the basis of qualitative and quantitative methods;

3) forming of the register and summary risk register with ranging of objects and objects of control of degrees of risks, certain Item 41 this Standard system;

Final stage.

6-1. After carrying out all stages for determination of efficiency of response measures and change of degree of risks by the structural division responsible for planning, monitoring of risks is performed.

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