124 Billion KZT: Kazakhstan's Treasury Caught in Miscalculation

The Supreme Audit Chamber (SAC) audited the Treasury Committee, which engages in the main tasks of managing the national and local budgets, Orda.kz reports.

It revealed that the treasury system operates with violations that could lead to significant financial losses.

SAC reported that the chamber summed up the audit results.

The current SAC Head, former Prime Minister Alikhan Smailov, noted that the treasury committee was initially created to manage the Republican budget effectively. 

Its authority has been expanded: it services the execution of local budgets, the National Fund, and the Victims' Compensation Fund, and handles centralized state purchases. Today, the Committee's territorial bodies serve over 15,000 clients.

However, it makes notable mistakes in managing budget finances and making payments. 

One such miscalculation may have cost the state tens of billions of tenge.

The Treasury Committee, in violation of the norms of the Budget Code, issued securities in excess of the originally planned volume in certain months of 2021-2023. Although the outlook for the balance of funds in the cash control account of the republican budget was positive. This led to possible budget losses in the amount of more than 124 billion tenge, The SAC emphasized.

The Committee was also blamed for insufficient oversight over payments for construction projects financed from the budget.

The treasury only requires a contractor to have one supporting document — and it doesn't matter whether it complies with the law or has a note regarding the designer and technical supervision.

In Almaty, the local treasury department paid the contractor twice for reconstructing an administrative building using the same certificate. The company received 3.7 billion tenge, although the cost was lower — 2.5 billion tenge. 

Advances to contractors were also paid excessively. Even in cases where tender executors had outstanding advances from previous years, they were given funds "in advance" again.

In addition, the Committee cannot always supervise the targeted budget funds, the entirety of tax payments, etc.

Due to miscalculations in this area, there is a risk that unscrupulous subcontractors will receive profitable government contracts.

The audit revealed 70 procedural violations and 15 systemic deficiencies.

The Committee was ordered to fix them all. 

Alikhan Smailov also requested that the treasury improve its information system. This will allow for automatic blocking of payments that are carried out in violation of the law.

Original Author: Nikita Drobny