Public Finance Management and Budget Process
This domain tests how budget law shapes audit criteria and how auditors read the budget cycle, program documents, and treasury execution.
Budget framework
- The Budget Code No. 95-IV of 4 December 2008, as amended, governs the budget system, budget cycle, and intergovernmental transfers.
- The unified budget system includes the republican budget, local budgets, and the National Fund of the Republic of Kazakhstan.
- Principles include unity, completeness, realism, transparency, sequence, effectiveness, efficiency, responsibility, and targeting.
- The cycle runs through forecasting and drafting, review and approval, execution, accounting and reporting, and control.
- State planning links strategic plans to budget program passports with performance indicators; treasury executes commitments and payments.
What auditors test
- Legality and targeting of expenditure, efficiency, and reliability of budget reporting.
- Whether performance indicators are measurable and actually achieved.
Worked example
A budget program is approved at 2,000 million tenge. Actual cash spending is 1,850 million: 120 million unspent and 30 million paid for items outside the program passport. The auditor records (a) an execution shortfall requiring explanation, (b) a compliance violation for the 30 million, and (c) a planning weakness if the forecast was unrealistic. The 30 million is not netted against savings; each issue is classified separately and assessed for materiality.
Traps
- Treating budget approval as authority to spend outside the program’s purpose.
- Confusing a cash payment with a valid commitment.
- Ignoring National Fund rules and carryover conditions.