Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
Publicación cientíca en formato digital
ISSN-Versión Impresa 0798-1406 / ISSN-Versión on line 2542-3185
Depósito legal pp 197402ZU34
ppi 201502ZU4645
Vol.40 N° 74
2022
Recibido el 23/07/2022 Aceptado el 18/09/2022
ISSN 0798- 1406 ~ De pó si to le gal pp 198502ZU132
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Vol. 40, Nº 74 (2022), 347-362
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Inuence of state nancial control on
state authorities functioning
DOI: https://doi.org/10.46398/cuestpol.4074.18
Maxym Petrychuk *
Iryna Chekhovska **
Maryna Rudaia ***
Olga Koval ****
Vitalii Yatskovyna *****
Abstract
The purpose of the study is to characterize the impact of state
nancial control on the functioning of public authorities and to
highlight the directions for the development of state nancial
control in Ukraine. The methodological basis of the article is a
system of general and special scientic methods (dialectical,
formal-logical, comparative legal, analytical, etc.). It is proved
that in most countries there are formal systems of state nancial
control, the subjects of such control and their powers are clearly dened. It
has been established that in Ukraine there is a centralized model of activity
of state nancial control bodies, which does not meet the current challenges.
It is concluded that the presence of unied and clearly dened tasks,
methods and principles, taking into account the specics of the national
legislation and the socio-economic situation that ensures the eective work
of state nancial control bodies and improves nancial and budgetary
discipline. It is based on the priority of three vectors of development of the
state control system: formation of a clear structure of state control subjects;
development of a legislative framework and unied methodology and,
nally, introduction of modern information and innovative technologies.
Keywords: state nancial control; regulatory agencies; subjects of
nancial control; nancial discipline; scal decentralization.
* Graduate student group AP-20-3, Educational and scientic institute of law Department of
Administrative and Economic Law and Customs Security State tax University, Irpin, Kyiv region,
Ukraine. ORCID ID: https//orcid.org/0000-0002-7367-3973
** Doctor in Law, Professor, Head of the Department private law State tax University. ORCID ID: https://
orcid.org/0000-0002-7030-2456
*** Ph.D. in economics, associate professor, Associate professor at the department of criminal investigation
State tax University, Irpin, Kyiv region, Ukraine. ORCID ID: https://orcid.org/0000-0002-3877-6192
**** Ph.D. in Law, associate Professor, associate professor at the Department of Private and Public Law,
Kyiv National University of Technologies and Design, Kyiv, Ukraine. ORCID ID: https://orcid.
org/0000-0003-1509-7258
***** Ph.D. in Law, Dean of the Faculty of Training of Specialists for Pretrial Investigation Bodies, Odesa
State University of Internal Aairs, Odesa, Ukraine. ORCID ID: https://orcid.org/0000-0003-2535-
3913
348
Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
El impacto del control nanciero estatal en el
funcionamiento de las autoridades públicas
Resumen
El propósito del estudio es caracterizar el impacto del control nanciero
estatal en el funcionamiento de las autoridades públicas y resaltar las
direcciones para el desarrollo del control nanciero estatal en Ucrania.
La base metodológica del artículo es un sistema de métodos cientícos
generales y especiales (dialécticos, lógicos formales, jurídicos comparados,
analíticos, etc.). Está comprobado que en la mayoría de los países existen
sistemas formales de control nanciero estatal, los sujetos de dicho
control y sus poderes están claramente denidos. Se ha establecido que
en Ucrania existe un modelo centralizado de actividad de los organismos
estatales de control nanciero, que no responde a los desafíos actuales.
Se concluye que la presencia de tareas, métodos y principios unicados
y claramente denidos, teniendo en cuenta las especicidades de la
legislación nacional y la situación socioeconómica que asegura el trabajo
efectivo de los órganos estatales de control nanciero y mejora la disciplina
nanciera y presupuestaria. Se fundamenta la prioridad de tres vectores
de desarrollo del sistema de control estatal: la formación de una estructura
clara de sujetos de control estatal; desarrollo de un marco legislativo y
una metodología unicada y, por último, la introducción de información
moderna y tecnologías innovadoras.
Palabras clave: control nanciero estatal; autoridades reguladoras;
sujetos de control nanciero; disciplina nanciera;
descentralización scal.
Introduction
Control is an important factor in making eective management
decisions that is one of the necessary conditions for the existence of a legal
and democratic state. It allows identifying deciencies in the functioning
of state institutions, organizations, economic entities; it determines the
causes of their occurrence and directions for optimization of activities.
Control increases the discipline of employees of the management
apparatus, making it possible to objectively determine the level of their
awareness and responsibility. Therefore, taking into account the current
state of development of economic relations in Ukraine and the state of war,
reforming the state nancial control and budgetary relations, bringing
them into line with the requirements of the European Union, is of priority.
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Vol. 40 Nº 74 (2022): 347-362
State nancial control in the developed foreign countries is based on
the main principles of the Lima Declaration (Lima Declaration of Guiding
Principles of Control, 1977), the International Organization of Supreme
Audit Institutions (INTOSAI), the European Organization of Supreme
Audit Institutions (EUROSAI), which include Ukraine. Thus, the Lima
Declaration notes that each state has to create the highet agency of
nancial control in order to achieve eective and rational management
of state nancial resources, whose independence should be enshrined at
the legislative level. The process of nancial decentralization has been
taking place in Ukraine since 2014. In this process country’s economic
development level is an important factor when introducing reform of scal
decentralization (Slavinskaitė, 2017).
A component of scal decentralization reform is to increase the nancial
capacity of local authorities. This nancial capacity of local authorities is
based on the ability to attract existing and potential nancial resources
from this territory to nance economic, social and environmental needs,
to establish rational and eective directions for their distribution and
use. Fiscal decentralization is aimed at increasing the nancial capacity
of local authorities. This nancial capacity of local authorities is based on
the ability to attract existing and potential nancial resources from this
territory to nance economic, social and environmental needs, establish
rational and ecient directions for their distribution and use (Teremetskyi
et al, 2021a). Achievement of those tasks is possible only in the presence of
eective nancial control. In this regard, it is worth considering the positive
experience of the developed countries havig an eective system of nancial
control.
The scientic literature does not provide clear and unied approach
to the assessment of state nancial control in foreign countries. However,
scholars agree that control over distributed public nancial ows is a key
task in ensuring nancial security (Avdeev, 2021).
O. Z. Seleznov distinguishes the following systems of nancial control
depending on their consolidation in the constitutions of dierent states:
parliamentary (Russia), judicial (Turkey, Greece), specialized (Ireland,
Poland, Brazil) and presidential (Uzbekistan, Portugal) systems. However,
the development models of nancial institutions in foreign countries are
usually mixed and contain characteristic features of all the listed systems.
As an example, we can mention the nancial control systems of the
Czech Republic, Austria, and China, where features of parliamentary and
specialized systems are combined, or France and Italy, where parliamentary,
judicial and presidential systems are mixed at the same time (Seleznov,
2010).
Ukraine also has a mixed system of nancial control, which combines
elements of parliamentary and specialized systems, because the greatest
350
Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
attention in the system of state nancial control of the state is given to
external control, which is carried out by the Accounting Chamber of Ukraine
on behalf of the Verkhovna Rada. We can currently talk about two main
agencies, whose competence includes the implementation of state nancial
control in Ukraine – these are the Accounting Chamber of Ukraine and the
State Audit Service of Ukraine, which are the basis for further reforming
the system of state nancial control of the European model. At the same
time, the Accounting Chamber oers to transfer all nancial and control
activities to itself, leaving only internal control to the State Audit Service,
whose activities are directed and coordinated by the Cabinet of Ministers of
Ukraine (Dikan, 2019).
There are other approaches in the scientic literature to delimiting the
powers of the specied agencies. Thus, S.P. Yaroshenko believes that the
State Audit Service, like the Accounting Chamber, should carry out external
control, leaving the issue of internal control to internal control agencies
(Yaroshenko, 2007). V.K. Symomenko notes that the system of state
nancial control should eectively combine state internal and external
control, which will allow coordinating the work of all regulatory agencies
and contribute to the improvement of legal support and methodological
potential of control activities (Symonenko, 2006).
The above allows us to conclude that there is no unity in approaches
among scholars to dening the system of nancial control agencies in
Ukraine.
Analysis of the legislative framework of foreign countries regarding the
activities of state nancial control agencies indicates the need to improve
the system of state nancial control in Ukraine. The experience of using
this type of audit by regulatory agencies, such as an eciency audit,
contributes to the fact that the public sector of the economy is transparent
and manageable (Pihotskyi, 2016).
Germany, the USA, France, Great Britain are those countries that have
signicant experience in the formation and eective implementation of
the system of state nancial control. Each of those countries ensures an
increase in the responsibility and importance of state nancial control
agencies in its own way by providing them with sucient logistical base,
powers, separating them from the objects of control. At the same time,
most countries have a formed and stable market economy, where nancial
control is built on the principle of delimiting the areas of control agencies’
subordination and the absence of a single criterion for their classication.
Despite the need to stabilize the state’s economy during martial law,
Ukraine continues to reform the system of state nancial control in the
country. However, the specics of the inuence of state nancial control
on the eectiveness of the functioning of state authorities, as well as the
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directions of its development in Ukraine, are still not scientically studied.
The purpose of this article is to study this issue.
1. Methodology
The following research methods were used in this article:
• the dialectical method of scientic cognition of ideas about
the impact of state nancial control on the functioning of state
authorities allowed us to consider them within their relationship and
development with a number of related denitions in administrative
and nancial law, to identify established patterns and directions of
their implementation;
• the formal and logical method contributed to clarifying the essence
and main tasks of state nancial control, analysis of the concepts of
“state nancial control”, “state power”;
• the logical and semantic method was applied to dene conceptual
structures regarding state nancial control, powers of regulatory
agencies;
• the structural and functional method was applied to nd out the
characteristic features of the activity of state nancial control
agencies and their impact on state authorities’ functioning;
• the comparative and legal method consists in comparing the
systems of state nancial control of dierent countries in order to
identify their similar or distinctive features;
• the analytical method became the basis for studying the legal
principles for regulating the impact of state nancial control on
state authorities’ functioning and the analysis of normative and
legal regulation in the relevant sphere of relations.
2. Results and Discussion
2.1. International experience of ensuring state nancial control
According to the liberal intergovernmental approach, while maintaining
state “diversity”, control over the society life processes should remain in
hands of state, within which civil society exist and develop (Gryshchenko
et al., 2021).
Taking into account the previously dened tasks, we believe it expedient
to determine the priority areas of state nancial control and, accordingly,
its model – centralized or decentralized.
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Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
Let’s start with the analysis of the experience of using the centralized
model, which is implemented in France and has a stable socio-economic
development. State nancial control in this country is centralized and has
vertical interdepartmental relations. A positive point of such an organization
is that the regulatory agencies have considerable experience in the eld of
control over the expenditure of budget funds, the appropriate sta and the
status of civil servants assigned to the employees.
The General Inspectorate of Administration and the General
Inspectorate of Finance are nancial control agencies. These agencies are
directly subordinated to the Minister of Economy and Finance. The General
Inspectorate of Finance performs control functions over the activities of the
local departments of the Ministry of Economy and Finance. It supervises
the activities of all accountants who are appointed to public positions and
administrative accounting oces of managers of secondary loans, state
enterprises, as well as those state agencies and enterprises that are under
the nancial control of the state. The General Inspectorate of Finance
commissioned by state ministries and departments, as well as on its own
initiative conducts and organizes research on economic and nancial
results (Aleksandrovych, 2014).
State nancial control is also managed by the Accounting Chamber,
which primarily monitors that economic reporting meets the criteria dened
in legislation. It is entrusted with the task of identifying and preventing
violations in the budgetary and nancial sphere, facilitating parliamentary
and governmental control of activities aimed at implementing laws in the
sphere of nance. An important role in the management of centralized
nancial resources belongs to specialized state entities, such as the Banking
Control Commission, the National Credit Council, the Commission for
Economic and Regional Development of the country. State nancial control
is aimed at evaluating both the eectiveness of the use of budget funds and
the eectiveness of the work of various state organizations (Stefaniuk,
2005).
At the same time, this model of activity of state nancial control agencies
is mostly characterized by a lack of both mobility and exibility, as well as
mutual control of agencies resulted to a risk of internal corruption.
The current system of state nancial control in the USA is built on the
basis of the principle of separation of powers without the creation of a
special agency that performs administrative control and nancial functions.
That is, there is a diverse system of state nancial control agencies in this
country functioning on the basis of independence and ensuring the balance
of powers of both the legislative and executive branches of power.
The executive branch of government is represented by the Administrative
and Budgetary Department, whose sphere of activity includes issues of
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nancial control, which also evaluates the eectiveness of management and
organizational structures and ensures the coordination of their activities.
The agency of state nancial control is the Main Control Department of the
Congress. It has signicant oversight powers over all government contracts
and programs, and conducts research to evaluate the eectiveness of the
suggested programs. Inspectors of this Department also verify the activities
of auditors of the executive power. In some cases, it is possible to coordinate
actions with the investigative units of the Ministry of Justice and other
agencies endowed with relevant powers for verication (Malyshev, 2003).
We believe that such organization of the activity of nancial agencies
system assists to achieve the most eective nancial policy, since the
indicated system is suciently exible (all agencies have a high degree
of specialization and mutual control; nancial management agencies in
the USA are independent and autonomous while implementing tax and
nancial policy).
There is also an advisory agency within the nancial management system
along with the federal agencies, which are represented by the Main Control
and Audit Department and the Administrative and Budgetary Department.
This agency is entrusted with the responsibilities of forming the foundations
of the economic and nancial policy of the country (Szostakowski, 2016).
The construction of the system of state nancial control in Sweden is
carried out on the basis of a socially oriented economy. There is a three-
level system of state nancial control over the use of budget funds in
this country: district, municipal and national. The main body in matters
of state accounting and control is the State Audit Oce, whose activity
is characterized by two areas: the audit of the eectiveness of public
procurement and the annual audit of the nancial and economic activities
of enterprises and institutions at the national level.
Its task is to achieve high-quality management of nancial activities.
Unlike other European countries, Swedish central executive authorities are
not empowered to manage government departments. Therefore, the Basic
Law of Sweden enables the government and parliament to have their own
control units in the public sphere (Hubanova, 2012).
The beginning of a new method of control was laid in Sweden. It was
“performance control”, which was the basis of the activities of most world
countries. In the process of eciency control, special attention is focused on
the assessment of the consequences of the decisions taken by the authorities
in the nancial and budgetary sphere. A successful evaluation of the
eectiveness of the authorities’ activities contributes to the eective socio-
economic eect of the spending of budget funds. The results of performing
audit and the nancial audit are reected in detailed reports, which are
sent to one of the responsible Auditors General, whose competence is to
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Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
make decisions, which of them are subject to submission to the Parliament.
Subsequently, such reports are published in open sources for general
perusal (Polishchuk, 2014).
The given examples show that special nancial control agencies play
the leading role in the nancial control system in the developed foreign
countries. We also can see their clear hierarchical structure headed by the
Supreme Control Board with broad rights and powers. Other agencies are
subordinated to it or their work is coordinated and veried for eectiveness.
The unifying element in the legal status of modern highest control
institutions is their established accountability to the parliament within
constitutions, institutional independence from the executive authorities
and independence in planning the audit and its implementation. Such
independence is built on the principles of accessibility and openness
of audit results, as well as independence in the coverage of audit results
(Dmytrenko, 2010).
The autonomy of regulatory agencies in the professional and political
aspect consists in the procedural features of the appointment and dismissal
of their members, as well as the specied stay in the position of the head of
a particular agency (Pozhar, 2012).
One of the main conditions for rational, ecient and eective provision
of nancial and control activities in the vast majority of countries is the
presence of local divisions. Usually those divisions, depending on the form
of the country’s government, are partially or completely subordinated
to the Supreme Accounting Oce. At the same time, they retain their
independence in performing their functions and focus on auditing local
budgets regarding their fund’s expenses. If necessary, they promptly
perform the tasks of the central control institution. Similar regional oces
of the supreme budget control agency operate in France. It is believed that
the presence of such agencies in Ukraine will increase the eectiveness of
budget control at the local level in the future.
2.2. Specics of carrying out state nancial control in Ukraine
Centralized model of the activities of state nancial control agencies
currently operates in Ukraine. It consists of the following governing bodies:
the Accounting Chamber and the State Audit Service of Ukraine. The
Constitution of Ukraine established the status of the Accounting Chamber
as a constitutional agency acting on behalf of the Verkhovna Rada of
Ukraine and exercising control over the use of funds from the State Budget
of Ukraine. At the same time, the powers dened by the Constitution and
the list of functions of the Accounting Chamber can be supplemented and
changed based on the provisions of the Law of Ukraine “On the Accounting
Chamber” (2015), the Budget Code of Ukraine and other regulatory legal
acts (Constitution of Ukraine, 1996, Article 98).
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The activities of the Accounting Chamber were reformed towards the
introduction of parliamentary control over its activities in 2015. Thus, this
agency according to the Art. 1 of the Law of Ukraine “On the Accounting
Chamber” is a state collegial body accountable to the Verkhovna Rada of
Ukraine and informs it about the results of its activities (Law of Ukraine
“On the Accounting Chamber”, 2015). Similar provisions are enshrined
in the Art. 98 of the Constitution, the Art. 109 of the Budget Code of
Ukraine and the Regulations of the Accounting Chamber. Besides, this
agency is organizationally, functionally and nancially independent, and
also independently plans its activities. It means that the activity of the
Accounting Chamber does not depend on the activity of other regulatory
agencies.
Regarding innovations in the activities of the Accounting Chamber, it
should be noted that the Accounting Chamber has been applying the main
principles of the International Organization of Supreme Audit Institutions
(INTOSAI), the International Standards of Supreme Audit Institutions
(ISSAI) in its activities since 2015, in part that does not contradict the
Constitution and laws of Ukraine. An external audit and assessment of
the Accounting Chamber’s activities has become mandatory, as well as the
cooperation with the legislative agency has been improved.
We should note that those provisions are included in the Association
Agreement between Ukraine and the European Union, as well as in the
Agenda of the Association between Ukraine and the European Union for the
preparation and promotion of the Association Agreement’s implementation.
In addition, the Group of States against Corruption of the Council of
Europe (GRECO) provided recommendations on expanding the powers of
the Accounting Chamber in the Evaluation Report on Ukraine to conduct
an external independent audit of local self-government agencies in order to
cover all types of their activities.
The Article 4 of the Law of Ukraine “On the Accounting Chamber” states
that the powers assigned to the Accounting Chamber by the Constitution
are exercised through the implementation of measures of state external
control, which is ensured by the Accounting Chamber through dening two
types of audits – nancial and audit eciency. However, the Inspire and
Support of Supreme Audit Institutions (ISSAI) denes the presence of three
types of audit, to be more precise an additional audit of the compliance
with the aforementioned types of audit. The indicated types of international
standards are dierent in their specic implementation, tasks and purpose.
Therefore, it is necessary to ocially translate them into Ukrainian for their
implementation in accordance with the Art. 7 of the Law of Ukraine “On
Standardization” and INTOSAI.
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Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
It is important, because the Department of Strategic Development
of Analytics and Standards of the Accounting Chamber has developed
Methodical Guidelines for conducting nancial audit, where it is noted that
they are prepared taking into account the provisions and requirements of
the Inspire and Support of Supreme Audit Institutions (ISSAI). However,
due to the lack of an ocial translation, it is impossible to verify the
compliance of the specied Methodological Recommendations with
International Standards. It is interesting that there are no Methodological
Recommendations for conducting an eciency audit on the ocial website
of the Accounting Chamber.
Therefore, the Accounting Chamber is the highest agency of external
state nancial control in Ukraine, independent of any state agencies. The
powers of the Accounting Chamber are derived from the powers of the
Verkhovna Rada of Ukraine and it cannot go beyond their limits in its
activities in accordance with the Art. 19 of the Constitution of Ukraine
(Constitution of Ukraine, 1996).
It is worth noting that the economic development of Ukraine based on
decentralization and increasing the role of local budgets and local councils
in managing funds will improve the economic situation in territorial
communities. But in this case, there is a problem of state control over the
use of funds of territorial communities due to their signicant amount.
Therefore, means of monitoring and control should be implemented, which
should ensure smooth execution of tasks, as well as should increase the
productivity and eciency (Teremetskyi et al, 2021b). At the same time,
it is necessary to strengthen the responsibility of local self-government
agencies to the community.
Decentralization contributes to corruption, if political competition
at the local level is limited, minimizes the eectiveness of central
government control over the budgetary process at the local level, deepens
the dierentiation in the levels of regional development. (Teremetskyi et
al, 2021a). Kenya’s experience of decentralization is a vivid example of
innovation in economic development, because the local authorities created
a signicant number of nancial control agencies in order to overcome
corruption problems. Those agencies supervise certain economic spheres,
while simultaneously granting additional powers to local governments
(Zavalko, 2017).
The regulatory and legal provision for the activities of the Accounting
Chamber is dicult at the current stage both from the point of view of its
insucient compliance with international standards and from the point of
view of its limitations. As a result, the Accounting Chamber is not ecient
enough in its control measures, because it uses outdated methods to conduct
them. Given that the Art. 15 of the Law of Ukraine “On the Accounting
Chamber” establishes new powers regarding local budgets, the primary
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task for the Accounting Chamber is to take into account the development
of a strategy for the development of measures and tasks to regulate the
mechanisms of external audit of budgets at the local level.
International experience of the highest nancial control agencies proves
that the basis of their functionality is not so much the ght against crimes
in the nancial sphere, but methodical activities aimed at improving
the eciency of budget nancing. It is achieved not only through the
implementation of specic budgets, but also through legislative activity.
We believe that the Accounting Chamber of Ukraine should not be a
state agency, which is reected in the relevant law, but a state power
agency that has the right to exercise its powers in relation to agencies and
ocials under its control. In order to improve the overall eectiveness of
the Accounting Chamber, it is necessary to grant it the right to suspend
the implementation of those decisions regarding which it has initiated
one or another investigation until the relevant agency provides a reasoned
response. However, such decisions of the Accounting Chamber should be
subject to appeal in court.
The State Audit Service of Ukraine is the central agency of the executive
power, whose activities are directed and coordinated by the Cabinet of
Ministers of Ukraine and which ensures the formation and implementation
of state policy in the eld of state nancial control. The agencies of the State
Audit Service of Ukraine include the central apparatus and its interregional
territorial agencies. Normative and legal acts that regulate the activities of
the State Audit Service of Ukraine are the Law of Ukraine “On the Basic
Principles of State Financial Control in Ukraine”, the Budget Code and the
Regulations on the State Audit Service of Ukraine.
The main tasks of the State Audit Service of Ukraine are reected in
the Art. 2 of the Law of Ukraine “On the Basic Principles of State Financial
Control in Ukraine” and are realized by implementing state nancial control
over the use and preservation of state nancial resources, non-current and
other assets, the correctness of determining the need for budget funds and
making commitments, eective use of funds and property, compliance with
procurement legislation, etc. (Law of Ukraine “On the Basic Principles of
State Financial Control in Ukraine”, 1993).
The distribution of inspection and audit functions is carried out with
the help of an organizational change in the structure of the divisions of
the State Audit Service of Ukraine, that is, through the creation of audit
departments according to the relevant sectoral orientation. Nowadays,
the agencies of the State Audit Service of Ukraine conduct audits of state
target-oriented programs, activities of business entities, implementation of
budget programs, investment projects, local budgets, the Pension Fund of
Ukraine, and mandatory state social insurance funds. Each of these types of
audits is combined and does not meet international standards.
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Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
It is due to the fact that the audit service replaced the previously
existing State Financial Inspection without the necessary amendments in
the legislation. Amendments were made only in the new Regulations on
the State Audit Service of Ukraine, which established its subordination to
the Cabinet of Ministers of Ukraine. However, it would be more logical to
subordinate the Audit Service to the Ministry of Finance of Ukraine.
We believe that the existence of two main agencies in the eld of state
nancial control leads to a conict between those agencies and a decrease
in the eectiveness of nancial control measures. Herewith, the functions
of the State Audit Service are duplicated with the functions of the Ministry
of Finance in the eld of formation and implementation of state policy and
the functions of the Accounting Chamber in the eld of state nancial audit.
At the same time, there is no coordination of actions of the specied
agencies. A similar model exists in Argentina, where internal and external
nancial control is carried out by two institutions – the Main Audit Agency
and the Main Control Agency. Therefore, we consider it expedient to create
local agencies of the State Audit Service of Ukraine with the special status
and broad powers in the eld of supervision over budgets at dierent levels.
Pakistan’s experience is also important for the issue under consideration.
Since 2000 this country has had a specially authorized ocial – a nancial
advisor belonging to the system of state nancial control agencies. The main
powers of that ocial are consultative functions, which are manifested in
providing advice not only to nancial control authorities, but also to other
authorities and ministries (Government of Pakistan, 2006).
Considering that fact, a signicant part of the reforms oriented towards
the European vector of the development should be implemented by the end
of 2022, it is necessary to make appropriate amendments to the Ukrainian
legislation on state nancial control as soon as possible.
Conclusion
Therefore, the current situation that has developed in the eld of state
nancial control cannot allow the state nancial control agencies of Ukraine
to eectively perform their functions due to the existence of a model, where
there are two main regulatory agencies, which do not have a common vector
of development and an appropriate legislative framework regulating their
activities.
International experience in the outlined topic shows that the following
steps must be taken for state nancial control agencies’ eective work:
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Vol. 40 Nº 74 (2022): 347-362
• to clearly dene the control functions of responsible agencies in the
nancial sphere and to enshrine them in the Constitution of Ukraine
and special legislation by ensuring the absence of duplication of
their powers;
• to develop and implement uniform generally accepted standards
and methods, as well as terminology in the researched eld;
• to ensure the introduction of eective mechanisms for the
implementation of various types of state nancial control and to
eliminate conicts in the current legislation;
• to consider all current standards of the International Organization
of Supreme Audit Institutions (INTOSAI), the International
Standards of Supreme Audit Institutions (ISSAI) and to develop
national implementation strategy requirements of the specied
acts, taking into account the positive international experience.
It has been concluded that the presence of unied and clearly dened
tasks, methods and principles, taking into account the specics of national
legislation and the socio-economic situation ensures the eective work
of state nancial control agencies and improves nancial and budgetary
discipline.
The authors have proved the expediency of forming a system of state
nancial control in Ukraine with an orientation towards a mixed model,
which combines elements of parliamentary and specialized systems. Such
a model will contribute to increasing the eectiveness of state nancial
control agencies, will eliminate the features of chaos and will make it
possible to implement preventive measures both at the state and local levels
for the proper use of the country’s nancial resources.
The authors have substantiated the priority of three vectors of the
development of the system of state nancial control: development of the
legislative framework and unied methodology of state nancial control,
its standards; formation of a clear structure of subjects of state control;
introduction of modern information and innovative technologies in the eld
of state nancial control, which will contain uniform criteria for control
activity.
Further research of the possibilities of implementing better
international experience in the functioning of the state nancial control
system is perspective. It will allow the proper implementation of control
activities and create an eective tool for providing society and the state with
objective, high-quality indicators necessary for improving the eciency of
public administration.
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Maxym Petrychuk, Iryna Chekhovska, Maryna Rudaia, Olga Koval y Vitalii Yatskovyna
Inuence of state nancial control on state authorities functioning
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