JOINT NORMATIVE RESOLUTION OF CALCULATING COMMITTEE ON CONTROL OF EXECUTION OF THE REPUBLICAN BUDGET OF THE REPUBLIC OF KAZAKHSTAN AND ORDER OF THE MINISTER OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of November 28, 2015 No. 10-HK, 27 of November, 2015 No. 590

About approval of the Single principles and approaches to risk management system applied by bodies of the state audit and financial control

According to Item 1 of article 18 of the Law of the Republic of Kazakhstan of November 12, 2015 "About the state audit and financial control" Calculating committee on control of execution of the republican budget (further - Calculating committee) POSTANOVLYAET and the Minister of Finance of the Republic of Kazakhstan PRIKAZYVAYET:

1. Approve the enclosed Single principles and approaches to risk management system applied by bodies of the state audit and financial control.

2. To provide to legal department of Calculating committee in the procedure established by the legislation:

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

2) within ten calendar days after state registration of this joint normative resolution and the order 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 joint normative resolution and order on Internet resource of Calculating committee.

3. To assign control of execution of the joint normative resolution and the order to the chief of staff of Calculating committee and the responsible secretary of the Ministry of Finance of the Republic of Kazakhstan.

4. This joint normative resolution and the order becomes effective after ten calendar days after day of its first official publication.

Approved by the joint Normative Resolution of Calculating committee on control of execution of the republican budget and the Order of the Minister of Finance of the Republic of Kazakhstan of November 28, 2015 No. 10-HK, 27 of November, 2015 No. 590

The single principles and approaches to risk management system, applied by bodies of the state audit and financial control

1. General provisions

1. These Single principles and approaches to risk management system, applied by bodies of the state audit and financial control (further - the Single principles and approaches) are developed according to Item 1 of article 18 of the Law of the Republic of Kazakhstan of November 12, 2015 "About the state audit and financial control".

2. The purpose of the Single principles and approaches is increase in efficiency of forming of the list of objects of the state audit for the corresponding year, carrying out the state audit and other activities of bodies of the state audit and financial control (further - bodies of the state audit), creation of methodological basis for development of standard risk management systems by bodies of the state audit.

3. When using these Single principles and approaches 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, concepts of development of the industry/sphere, national projects, the budget programs, development plans for state bodies, development plans for area, the cities 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 can lead to financial violations, plunders (waste) of budgetary funds and drawing economic damage to the state, and also probability of not achievement or non-execution in full of the target indicators and indicators provided in program and development plans for state bodies;

5) matrix risk – the matrix used in risks assessment, representing ranging of risks on their degree has the ranges on probabilities and impacts, is applied in decision making process on response measures;

6) risk - the oriented selection – the system of administration providing:

carrying out effective planning and carrying out the state audit, based on the principles of optionality, optimal resource allocation on the most priority directions of auditor activities;

the direction of offers (recommendations) to objects of audit on the basis of risks assessment of objects of audit or areas of risks for the purpose of minimization of influence of risks;

7) 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;

8) 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;

9) 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;

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

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

12) 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;

13) 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;

14) 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;

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