Ministry of Finance of the Republic of Kazakhstan Treasury Committee Topic: «Integration of External Financing in the Process of Budget, Accounting and Reporting Execution»
EXTERNAL FINANCING IN THE PROCESS OF BUDGET EXECUTION LEGAL ENVIRONMENT: 1. International loan agreements ratified by the Parliament of the Republic of Kazakhstan and international financial institutions Guidelines. 2. Budget Code of the Republic of Kazakhstan #95 -IV of 4. 12. 2008 3. Government Decree on “The rules of Budget administration and cash services” #220 of 26. 02. 2009 4. Government Decree of the Republic of Kazakhstan “On Reporting on state external loans” #616 of April 21, 2000 The procedure of borrowing, usage, redemption and facility of government external loans is defined by the Government of the Republic of Kazakhstan. Ministry of Finance Treasury Committee of the Republic of Kazakhstan: • Carries out financial procedures on debiting from state external loan accounts, relevant grants, cofinancing resources from the republican budget and monitors their application; • Performs payments from the republican budget, directed on repayment and service of republican loan obligations. Statistical data on external loans is published on the Republic of Kazakhstan Ministry of Finance web-site (www. minfin. kz).
As of February 1, 2012 in the Kazakhstan Republic There are 21 investment projects financed at the expense of external governmental loans at a stage of implementation, including: 12 projects – IBRD 5 projects – ADB 2 projects – JICA (Japan) 1 project – IDB 1 project – EBRD The Treasure Committee is serving 45 external governmental loans at the expense of republican budget, including: 16 projects – IBRD 10 projects – ADB 5 projects – IDB 5 projects – JICA (Japan) 3 projects – EBRD 3 projects – Kf. W (Germany) 1 project – ADFD (UAE) 1 project – KFAED (Kuwait) 1 project – SFD (Saudi Arabia) Note: The projects finance at the expense of relevant grants and guaranteed by the state loan are not included in the lists
Chart of External Loan Expenditures by Means Of Direct Payment Creditor (loan account) 3 4 Payment Goods, work and services supplier Request for payment Budget Program Administrator 1 The request for payment approved by Administrator (for signing) 2 The signed request for payment Treasury Committee 6 The report on receipt and expenditure 5 Written extract Integrated information system of treasury 7 Summary report
Chart of Special Account Disbursement Payment Special account in Kazakhstan commercial bank Request for payment Goods, work and services supplier 2 1 Written extract 3 6 Creditor Detailed monthly report Budget Program Administrator Integrated information system of treasury Expenditures report 4 Summary report 5 Treasury Committee
Chart of Redemption and Servicing Procedure for Government and State Guaranteed Debt of the Republic of Kazakhstan from the Republican Budget 1 Creditor 2 Invoice for payment of internal loans Invoice for payment of external loans Correspondent bank of creditor Treasury Committee 7 Payments of Kazakhstan external loans and services in foreign currency Actual data on payments Daily extract on expenditures 4 Kazakhstan National Bank 6 Request for converting foreign currency and tenge coverage of foreign currency procurement 8 JSC “Central securities depositary institution” Department of state loans of Kazakhstan Ministry of Finance Invoice for payment in tenge and 3 request for converting foreign currency Treasury department of Astana city Integrated information system of treasury Payments on redemption and service of internal debt of Kazakhstan 5
Treasury Committee Department of Republican Budget Reporting Head expert (6 units) Head of Department Expert (2 units) Republican budget accounting Functions Reception and verification of budget reporting from republic budget program administrators
Particularities of Accounting and Financial Reporting During Project Management Using External Financing Legislative environment: • • Budget Code of the Republic of Kazakhstan of December 4, 2008. The rules of the budget accounting #495 of November 16, 2009. The procedure of the budget accounting of republican and local budgets execution is defined by the Republic of Kazakhstan Ministry of Finance and the accounting itself is done by Treasury Committee of the Republic of Kazakhstan Ministry of Finance. The Treasury Committee of the Republic of Kazakhstan Ministry of Finance carries out the system of gathering, registration and generalization of information on requirements and obligations of the Republic of Kazakhstan in monetary terms regarding transactions usingle treasury account, control cash accounts and public institutions accounts. The system is regulated by budget legislation of the Republic of Kazakhstan. The budget accounting is budget execution tracking implemented on cash basis, when transactions are reflected on bills with double recording according to the chart of accounts. Budget accounting is done in national currency of the Republic of Kazakhstan.
Budget Accounting Chart of Accounts • • Accounts are grouped into seven groups of the main book and one off-balance accounts group in the following way: 1. Financial resources including Single treasury account 2. Funds in the National bank of the Republic of Kazakhstan (deposits) 3. Control cash accounts and other accounts in national currency 4. Accounts in foreign currency 5. Settlements 6. Receipts 9. Results Off-balance accounts. To reflect the funds flow on external loans the following accounts are used: 302 «Account on external loans» , where the funds flow on external loans account is recorded. Receipt of funds is reflected by DB subaccount 302 and CR subaccount 610. Disbursement of funds is reflected by DB subaccount 510 and CR subaccount 302 510 «Disbursement of external loans» account disbursement of external loans are recorded» . 610 «Placing funds of external loans» account receipts of external loans are recorded. Budget accounting data is the basis for budget reporting on budget execution.
Reporting on External Loans in Budget Accounting Reporting on external loans Institution, program and subprogram code Office code Name of institution Donor Budget classification code Start of the year balance Loan receipt Loan disbursement End of reporting period balance 1 # 2 3 4 5 6 7 8 9 А Total Information on external loans disbursement in the framework of investment projects Budget classification code Adjusted budget for the reporting financial year Reporting year financing summary plan Disbursement Total The balance of unused funds On spec. account On off-shore payments For the reporting period 1 Total 2 3 From the start of the year For the reporting period From the start of the year 4 5 6 7 8 9 10
Accounting in Public Institutions Legislative Environment: • • Budget Code of the Republic of Kazakhstan of December 4, 2008. Guidelines on accounting in public institutions #30 of 27. 01. 1998 and Rules of budget reporting by public institutions and budget program administrators #89 of 27. 02. 2009. Accounts are grouped into seven groups of the main book and one off-balance accounts group: • 1. Assets • 2. Inventory • 3. Assets of low unit cost • 4. Production costs and others • 5. Funds • 6. Internal payments • 7. Settlements • 8. Disbursement • 9. Financing • 10. Funds and earmarked funds • 11. Products sale • Off-balance accounts. To reflect the funds flow on external loans the following accounts are used : - 099 «Plans for liabilities on projects funded by external loans and relevant grants» - 113 «Special account of budget investment project on external loans» - 151 «Liabilities settlement at the account of external loans» - 204 «Disbursement on projects funded by external loans» - 239 «Project funding by external loans» - 249 «External loans»
Reporting on External Loans in Public Institutions Accounting Report on external loans Report on grants Functional group___________ Budget program administrator_________ Name of public institution, implementing investment project_________ Budget program________________ Subprogram___________________ Periodicity: annual, quarterly_________ Measurement unit: thousand tenge Name 1 Balance for the start of the year Received from the start of the year- total Including (from donor) - ADB -IBRD -Earmarked transfers from republican budget Spent since the start of the year – total including (by specifics) Special account balance at the end of the reporting period including – foreign currency - tenge special account Loan # 2 Lin e cod e 3 Revenue or specifics code Amount Total Name Relevant grants 1 2 3 Off-shore payments 7 Balance for the start of the year - total 010 6 including cash balance 011 Current year receipt 020 Total 040 Expenditures – total 5 On spec. accou nt 050 Х 041 042 043 044 045 050 Line/spec. code Х 4 010 040 Budget program administrator _________ Periodicity: annual, quarterly _________ Measurement unit: thousand tenge including by specifics Balance at the end of reporting period including cash balance Х 170 Х 171 172 Х Х 170 171
Verification of Accounting Data Budget accounting data on external loans of Treasury Committee Budget accounting data on external loans of republican budget program administrators Republican budget execution data
Thank you for your attention! Contacts: a_dost @ minfin. kz I_zhusipalieva@minfin. kz
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