International experience in public finance management

The study, knowledge and analysis of the best foreign practices is undoubtedly important and relevant for the development of the Republic of Kazakhstan in terms of the budget process, liquidity management of the unified treasury account, budget planning and execution, public procurement system, accounting and reporting system in accounting.

Consideration of the best foreign practices allows you to notice changes (trends), and the analysis allows you to identify positive and negative aspects and assess the possibility of their use in domestic practice and its improvement.

The experience of the Republic of Korea can undoubtedly be attributed to one of the best foreign practices. All the ongoing state reforms of the Republic of Korea have included improvements in the budget process and liquidity management, and the latest reform has a dedicated task of creating an information system for financial management, so the experience of the Republic of Korea is of particular importance for the Republic of Kazakhstan.

The development of South Korea has been carried out and continues to be carried out under strict state control:

– the structure of state institutions under strict state control has been successfully built;

– four state reforms have been carried out on the initiative and under the government.

The current budget system of the Republic of Korea was the result of the consistent implementation of four key reforms:

1. Transition to medium-term budget planning, that is, the development and compilation of a 5-year plan based on macroeconomic indicators and statistical data.

At the same time, the budget law is adopted for a year. The process of drawing up the plan and budget execution is carried out, from the point of view of the ongoing reforms of the budget system of the Republic of Korea, using the best global practices.

2. Transfer to the system of budget planning on the principle of "top – down", which provides for the allocation of budget resources by sectors of the economy and by departments.
3. Implementation of a result-oriented budgeting system.
4. Integration of electronic budget and budget accounting.

The creation of a financial management information system is one of the four key objectives of the budget reform and is intended to support the implementation of updated budget management processes.

The key tasks facing the management information system are:

• support for the transition to program budget management, transition to monthly program execution control;
• accounting by double entry and accrual method;
• automated reporting, linking and comparison of budgeting, accounting and income information;
• increasing the transparency of the national financial system (interactive interaction, single entry point, integration of government systems, e-procurement, reduction of non-targeted expenditures).

The history of the development of information systems of the Republic of Korea in the field of public finance management includes several stages.

One of the stages was the development and commissioning of the dBrain information system. The new dBrain information system was created by integrating and developing existing NaFIS and FIMsys systems, taking into account the requirements of ongoing financial reforms (including the transition to a program budget and accrual accounting). The management system improvement program has also been completed, an efficiency management system has been developed, and the development of a state property management system has been completed.

At the moment, the integrated budget information system dBrain covers all budget operations of the state budget, including those related to the formation and execution of the budget, management of treasury operations, supports accounting based on programs and accrual method. The dBrain system includes modules integrated with each other, including "Budget Planning", "Project Management", "Payments", "Income", "Accounting" and the ability to view the evaluation of the effectiveness of projects and programs.

To ensure the interrelated processes of public administration, the automated information interaction of the dBrain system with external information systems, such as:

• KONEPS procurement management system;
• a banking system that allows online exchange of information with the Central Bank's payment system;
• budget statistics analysis system;
• the system of calculation and accounting of tax charges.

Electronic invoicing and accounting of payments made by payers is carried out using the subsystem of electronic invoicing and payment accounting.

To interact with citizens, the Internet portal Home Task System (HTS) has been implemented, through which a citizen can receive information about accrued taxes, debts, print out a payment invoice for presentation at the bank (in case of payment through a commercial bank).

The introduction of information technologies, which are used in the field of taxation, administration of budgetary funds and in public procurement, makes it possible to implement relevant government reforms effectively and in the shortest possible time, minimize the volume of violations, ensure transparency and accessibility of information.

It should be noted that all government agencies of the Republic of Korea are integrated into a single dBrain information system, which includes all areas of activity (taxation, public procurement, budget planning, etc.).

It should also be noted that in public procurement in the Republic of Korea, customers do not determine the qualifications of suppliers. Qualifications are determined by the state order service in consultation with an independent community of companies and government organizations that rank suppliers according to their qualifications, ability, field of activity and other parameters.

Thus, it can be said that, in essence, the reform of the budget system carried out by the Government of the Republic of Korea is aimed at improving the efficiency of public resource management and represents a successful combination of planned and market methods for the formation and distribution of financial resources.

In the future, the most in–demand for study in the Republic of Kazakhstan are the work of the Treasury of the Republic of Korea on the management of CEN liquidity - the issuance of short-term treasury bills and the transition to next-generation technologies that allow for more complex online interaction between government agencies and consumers, including through personalized services, contextual information searches.

The possibility of issuing short-term securities for the purpose of covering the temporary cash gap, a detailed study of the mechanism of the Treasury of Korea in this direction can bring a significant positive effect for the Republic of Kazakhstan.