2004年-世界发展银行全球_Kyrgyz_Republic___Country_Financial_Accountability_Assessment_70页_5mb

Kyrgyz Republic Country Financial Accountability Assessment Summary

Core Content

This report, prepared by the World Bank in March 2004, evaluates the financial accountability framework in the Kyrgyz Republic, focusing on both public and private sectors. It aims to assess the effectiveness of current systems in ensuring the proper use of public and donor funds, identify systemic weaknesses, and recommend reforms to strengthen accountability and governance.

Key Findings

1. Country Context

• The Kyrgyz Republic is a small, mountainous country with a predominantly agricultural economy and a population of about 5 million.
• It is among the poorest countries in the former Soviet Union, with a per capita income of around US$300 in 2001 and 52% of its population considered poor.
• The country has made progress in market reforms and fiscal adjustments, but faces a heavy burden of external debt.
• A Comprehensive Development Framework (CDF) and a National Poverty Reduction Strategy (NPRS) have been established.

2. Government Structure

• The President retains significant decision-making powers and is responsible for forming the government.
• A bicameral Parliament provides legislative oversight over the executive.

3. Fiduciary Risk Assessment

• There is a moderate to high degree of fiduciary risk due to:
  • Weak cash planning and management.
  • Absence of effective budget evaluation mechanisms.
  • Weak internal controls and no internal audit function.
  • Insufficient accountability arrangements for State-Owned Enterprises (SOEs).
  • Weak external audit capacity.
  • Limited legislative oversight capabilities.

4. Current Financial Systems

• The National Bank of the Kyrgyz Republic (NBKR) uses International Accounting Standards (IAS) for financial reporting.
• NBKR is audited by one of the Big 4 international audit firms.
• The Chamber of Accounts (CA) conducts external audits, but its capacity is limited and it lacks the ability to perform interim audits.
• The government has implemented a three-year rolling budget projection and a 1986 IMF-GFS compliant budget classification system.

5. Weaknesses in Public Sector

• Line ministries prepare modified accrual-based financial statements, but consolidated financial statements are not prepared.
• There is no analysis of unpaid liabilities in line ministries' financial statements.
• The treasury system lacks modern internal controls and has issues with payment reconciliation and float management.
• The parliamentary Budget and Economic Policy Committee lacks the capacity to provide meaningful oversight and analysis.

6. Private Sector Accounting

• All business enterprises are required to adopt IAS for financial reporting, but this places a significant burden on small and medium enterprises.
• The State Commission on Standards of Financial Accounting and Audit (SCSFAA) has weak capacity to regulate and oversee the audit profession.

7. Social Fund (SF)

• The Social Fund manages large resources and has a relatively autonomous structure.
• Its internal audit function is weak and lacks modern techniques.
• A manual pension database is prone to errors and manipulation.

Main Recommendations

1. Budgeting and Implementation

• Establish realistic expenditure allocations supported by effective cash planning.
• Develop clear criteria for selecting capital projects, including technical, economic, financial, environmental, and social considerations.
• Create a budget evaluation function to assess the effectiveness of budget implementation and improve program accountability.
• Strengthen line ministries' capacity to perform program budgeting and understand financial reporting.

2. Internal Controls and Audit

• Implement daily reconciliation procedures in the treasury system to improve accuracy and transparency.
• Establish a modern internal audit function to continuously evaluate internal controls and assist line ministries in program implementation.
• Enhance the capacity of the Chamber of Accounts (CA) by adopting modern audit techniques and allowing interim audits.

3. Accounting and Financial Reporting

• Develop consolidated financial statements for the government to provide a comprehensive view of liabilities and financial performance.
• Update and revise accounting regulations to include modern reporting formats, a revised Chart of Accounts, and guidelines for consolidation.
• Consider auditing consolidated financial statements by the CA and presenting them to Parliament for informed discussion.

4. Legislative Oversight

• Strengthen the parliamentary Budget and Economic Policy Committee with research and analytical capacity.
• Provide exposure to international best practices in legislative scrutiny.
• Explore the possibility of establishing a fiscal analysis office within the Parliament.

5. Social Fund Reforms

• Strengthen internal audit within the Social Fund (SF) and introduce a computerized central pension database.
• Conduct periodic financial audits of SF operations by experienced international audit firms.

6. Private Sector Reforms

• Conduct a comprehensive review of IAS implementation experience.
• Determine the applicability of IAS to private entities, particularly closely held companies, partnerships, and sole proprietorships.
• Adopt International Standards on Auditing (ISA) and a Code of Ethics by the SCSFAA to improve audit quality and professionalism.

Conclusion

The Kyrgyz Republic has made progress in establishing a legal and institutional framework for financial accountability, but significant reforms are needed to address systemic weaknesses. The report emphasizes the importance of a well-functioning internal audit system, effective budgeting and evaluation mechanisms, and enhanced legislative oversight. It also highlights the need for capacity building and the adoption of international standards in both public and private sectors. Strengthening financial accountability is crucial for the effective implementation of Bank programs and the sustainable use of public and donor resources.