Fiscal Transparency at Local
Level
Baki Kerimoğlu
7 June 2005, ISTANBUL
Contents:
•
•
•
•
•
Transparency,
Implementation of transparency ,
Legal infrastructure of transparency
Factors obstructing transparency at local level,
Effects of reform studies on transparency at local
level,
• Transparency, accountability and audit,
• Conclusion,
What is transparency?
• It is a policy of providing information for public and
shareholders concerning functions, organization, economic
and fiscal policy goals, financial estimates and accounts of
an administrative unit.
• It includes access to reliable, detailed, current,
understandable and internationally comparable information
about the activities of the administrative unit.
• Thus, voters, legislative body, financial markets and other
shareholders are duly informed about the present and
future financial position and activities of the administrative
unit.
Implementation of transparency:
General Conditions:
• That role and responsibilities are clear,
• That information is accessible to the public,
• That budget preparation, implementation
and reporting processes are transparent,
• Guarantees concerning liabilities of issuing
data,
• Institutional culture,
Implementation of Transparency: Special
Conditions:
• Budgetary reports
-Budget document,
-Monthly reports,
-Midyear reports,
-Year end reports,
-Pre-election report,
• Reports related to the extra budgetary transactions,
-Reports related to management and utilization of assets,
-Reports related to the activities intending to increase quality and security of
life such as health, education, water, road, social security and social activities,
• Reliability, audit and accountability,
-to clearly determine accounting policies, management system and financial
and managerial responsibilities, process audit, internal audit and public audit,
-Standards (quality) of data issuing,
-Individual transparency culture.
Legal infrastructure of
transparency:
•
Public Financial Management and Control Law No 5018,
Article 7- Fiscal transparency,
Article 8- Accountability,
I-Information is accessible
to public
Article 41- Accountability reports
Article 49- Accounting system,
Article 50- Recording time and Documents to be used,
Fifth Part, Internal Control system
-Actors of internal control system,
1-Authorizing officer,
2-Realization officers
II-Role and responsibilities
are defined clearly
3-Financial controller
4-Accounting officer,
5-Financial Services Unit,
6-Internal Auditor,
Legal infrastructure of
transparency:
• PFMC Law No 5018,
Article 12- Budget types and scope,
III-Budget preparation,
implementation and
reporting processes are
transparent
Article 15-19 Central Government Budget Law,
Article 20-30 General Principles for Implementation of Budgets ,
Article 31-35 Spending authority,
Article 36-40 Collection of revenues,
Article 41-43 Accountability reports and final account
Article 49-54 Public accounts and financial statistics
Legal infrastructure of
transparency:
• PFMC Law No 5018,
Article 63-67 Internal audit,
Article 68 External audit,
Efficiency and functional independence
of the ones preparing data,
Institutional environment (culture),
IV-Reliability
of data
Legal infrastructure of
transparency:
• Municipality Law No 5272,
Article 25 Auditing commission,
Article 26 Municipal council’s ways of acquiring information and
auditing,
Article 54-55 Purpose, scope and types of audit,
Article 56- Accountability report,
Article 59 Municipality revenues,
Article 60 Municipality expenditures,
Article 61-66 Budget system and final account,
• Acquisition of Information Law No 4982,
Transparency at local level:
Negative effects on transparency:
• No budgetary discipline,
• No accounting and reporting standards,
• No standards of data issuing,
• Not efficiently using instruments of data issuing,
• No creation of institutional culture,
• Poor understanding for being democratic and participation in the
management,
• Poor internal audit,
• Poor external audit,
Positive effects on transparency:
• Positive efforts based on willingness,
• Technological improvements: Internet and TV,
• New legal arrangements such as Law on Right to Acquire Information,
Effects of reform studies on transparency at local
level:
• Effects of reform studies in public administration
(localization),
-More authority and responsibility (decentralization),
-More allocation of resources (fiscal decentralization),
-More transparency and accountability
• Effects of financial reform studies (financial
localization),
- Devolving more spending authority upon local governments,
-Modern financial management system,
-Accrual based accounting and reporting,
-Effective internal and external audit,
Transparency, accountability and audit:
• Transparency, accountability and audit are
complementary,
• Transparency not being supported by a sound
accountability culture is insufficient,
• Transparency not being supported by a sound
audit system lacks guarantee,
• Accountability and audit system not being
supported by a sound transparency culture do not
contribute to democratic development,
Conclusion:
(-) Institutional and individual culture are not sufficient for
an advanced transparency,
(-) Accountability and audit systems to complete transparency
are poor,
(-) Arrangements contributing to transparency are new and
their effects have not been evaluated yet,
(+) EU adaptation process and increasing interaction with
international organizations encourage public administration
for much more transparency,
(+) Participation of NGOs in public administration process
will strengthen transparency,
(+) Institutional organization contributing to transparency will
grow stronger depending on improving reform studies,
Thank you for your
attention
Baki Kerimoğlu
bkerimoglu@muhasebat.gov.tr