The Supreme Audit Chamber has completed the audit of the consolidated financial statements of the republican budget for 2023

The Supreme Audit Chamber has completed the audit of the consolidated financial statements of the republican budget for 2023

At the meeting of the Supreme Audit Chamber, the results of the state audit of the consolidated financial statements of the republican budget (CFS RB) for 2023 were considered.

The main purpose of the CFS RB is to objectively and reliably reflect the assets, liabilities, income and expenses of the state at the national level. For 2023, it was compiled based on the reports of 39 administrators of budget programs.

According to the presented data, the total amount of assets of the republican budget as of January 1, 2024 amounted to 25.5 trillion tenge with an increase of 7%. Over the past 5 years, there has been an annual excess of expenditures over the revenues of the republican budget, which naturally leads to a decrease in the accumulated financial result.

Also, according to the results of the audit, financial violations in the amount of 87.7 billion tenge, inefficient use of assets in the amount of 26.3 million tenge, as well as 25 procedural violations and 17 systemic deficiencies were established.

At the same time, the CFS RB for 2023 does not give a complete picture of the financial situation and the results of the financial activities of the state at the national level.

Thus, by the end of 2023, net assets amounted to minus 4.2 trillion tenge. This is primarily due to the biased (at cost) reflection of the following financial indicators:

  • Investments in quasi-public sector entities;
  • Budget loans granted to quasi-public sector entities;
  • Financial obligations (government debt).

If only the above three elements were objectively reflected, net assets as of January 1, 2024 would not have a negative (minus 4.2 trillion tenge), but a positive value and would be estimated at 12.7 trillion tenge.

In addition, assets that do not meet the recognition criteria continue to be reflected in the CFS RB for 2023, such as:

  • tax debts of taxpayers declared bankrupt;
  • debt in respect of which the state revenue authorities have taken all measures of compulsory collection;
  • debt of recipients of state guarantees who have not fulfilled their obligations under loan agreements.

At the same time, the audit results showed that many serviceable and used fixed assets are accounted for at zero cost, which does not meet the requirements of International Financial Reporting Standards for the public sector (IPSAS). Thus, the CFS RB reflects at zero cost:

  • 105 sections of highways of national importance in good and satisfactory condition;
  • about 14 thousand buildings used in the activities of government agencies.

Taking into account the established violations and the presence of systemic deficiencies, in accordance with Article 23 of the Law of the Republic of Kazakhstan "On State Audit and Financial Control", the Supreme Audit Chamber expressed an opinion with a reservation regarding the CFS RB for 2023.

As a result of the meeting of the SAC, amendments to existing regulatory legal acts aimed at ensuring a more reliable presentation of certain categories of assets and liabilities in accordance with IFRS were recommended.

In general, over the 5-year period since the submission of the first CFS RB for audit, there has been a significant improvement in its quality and reliability. In total, taking into account the recommendations of the SAC for all years, the Ministry of Finance has provided recognition and reliable reflection of assets in the amount of 5.7 trillion tenge, liabilities – by 297 billion tenge.