Treasury form of budgets servicing of Ukraine in the context of ensuring a balanced financial policy

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TREASURY FORM OF BUDGETS SERVICING OF UKRAINE IN THE CONTEXT OF ENSURING A BALANCED FINANCIAL POLICY

Vadym Polischuk

PhD in Economics, Associate Professor of Finance, Banking and Insurance Department, Lutsk National Technical University

Abstract

The article investigates the main problems of the treasury system of the execution of state and local budgets. The subject of the study is the treasury service of state and local budgets in the context of ensuring a balanced financial policy. The goal is to study how much the treasury service of budgets in Ukraine has changed over the past years. It is also worth to offer possible ways to improve the treasury service of budgets of different levels in the context of providing balanced financial policies. The study methodology involves the use of the following methods of empirical research methods (observation, comparison), methods of theoretical research (climbing from abstract to concrete), general methods used both on empirical and theoretical level of research (abstraction and concretization, analysis, synthesis, induction, deduction, analogy) and others. The systematization of literary sources and approaches to the treasury form of service of the budgets of Ukraine in the context of ensuring a balanced financial policy showed that most domestic scientists who dealt with this issue were considered separate areas of service of budgets. The relevance of solving this scientific problem is that the treasury form of service of the budgets of Ukraine is mainly considered technically, which in many cases does not allow it to apply it in the context ofproviding balanced financial policies as an effective tool for implementing the state policy.

The results of the study are: the theoretical approach to the issues of treasury maintenance of budgets of different levels is considered; the interaction of the bodies of the State Treasury of Ukraine with budget funds and in the context of decentralization of power is investigated; the implementation of revenues and social expenditures of the State Budget of Ukraine is analyzed. The originality of the study, and this is its practical value, it has been proposed to improve the control over the expenditure of budget funds and the modernization of the qualitative level of service by the state treasury authorities. Research conclusions are as follows: empirically confirmed and theoretically proved that the existing prospects for improving the treasury form of service of the budgets of Ukraine in the context of ensuring a balanced financial policy. The results of the study may be useful for financiers-practitioners, representatives of academic circles, students, all who are interested in treasury budget service.

Keywords: treasury; treasury service; budget revenues; budget expenditures; balanced development; financial policies.

Анотація

Вадим Григорович ПОЛІЩУК

кандидат економічних наук, доцент кафедри фінансів, банківської справи та страхування, Луцький національний технічний університет

КАЗНАЧЕЙСЬКА ФОРМА ОБСЛУГОВУВАННЯ БЮДЖЕТІВ УКРАЇНИ В КОНТЕКСТІ ЗАБЕЗПЕЧЕННЯ ЗБАЛАНСОВАНОЇ ФІНАНСОВОЇ ПОЛІТИКИ

У статті досліджено основні проблеми казначейської системи виконання Державного та місцевих бюджетів. Предметом дослідження є казначейське обслуговування Державного та місцевих бюджетів в контексті забезпечення збалансованої фінансової політики. Метою статті є дослідження змін у казначейському обслуговуванні бюджетів в Україні впродовж останніх років, а також надання пропозицій щодо можливих шляхів покращення казначейського обслуговування бюджетів різних рівнів в контексті забезпечення збалансованої фінансової політики.

Методологія дослідження передбачає використання наступних методів емпіричного дослідження (спостереження, порівняння), методів теоретичного дослідження (сходження від абстрактного до конкретного), загальних методів (абстрагування й конкретизація, аналіз, синтез, індукція, дедукція, аналогія) та ін. Актуальність вирішення наукової проблеми, визначеної у статті, полягає в тому, що казначейська форма обслуговування бюджетів України здебільшого розглядається технічно і це в багатьох випадках не дозволяє застосовувати її як дієвий інструмент реалізації збалансованої фінансової політики держави. Результати дослідження наступні: розглянуто теоретичний підхід до питання казначейського обслуговування бюджетів різних рівнів; досліджено взаємодію органів Державної казначейської служби України з розпорядниками бюджетних коштів та в контексті децентралізації влади; проаналізовано виконання доходів та соціальних видатків Державного бюджету України. Оригінальність і практична цінність дослідження полягає в тому, що запропоновано удосконалення контролю за витрачанням бюджетних коштів та модернізацію якісного рівня обслуговування органами казначейської служби. Висновки дослідження наступні: емпірично підтверджено та теоретично доведено, що наявні перспективи покращення казначейської форми обслуговування бюджетів України в контексті забезпечення збалансованої фінансової політики. Результати проведеного дослідження можуть бути корисними для фінансистів-практиків, представників академічних кіл, студентів, та всіх, хто цікавиться казначейським обслуговуванням бюджетів.

Ключові слова: казначейство; казначейське обслуговування; доходи бюджету; видатки бюджету; збалансований розвиток; фінансова політика.

Аннотация

Вадим Григорьевич ПОЛИЩУК

кандидат экономических наук, доцент кафедры финансов, банковского дела и страхования, Луцкий национальный технический университет

КАЗНАЧЕЙСКАЯ ФОРМА ОБСЛУЖИВАНИЯ БЮДЖЕТОВ УКРАИНЫ В КОНТЕКСТЕ ОБЕСПЕЧЕНИЯ СБАЛАНСИРОВАННОЙ ФИНАНСОВОЙ ПОЛИТИКИ

В статье исследованы основные проблемы казначейской системы исполнения Государственного и местных бюджетов. Предметом исследования является казначейское обслуживание государственного и местных бюджетов в контексте обеспечения сбалансированной финансовой политики. Целью статьи является исследование изменений в казначейском обслуживании бюджетов в Украине на протяжении последних лет, а также формирование предложений по возможным путям улучшения казначейского обслуживания бюджетов разных уровней в контексте обеспечения сбалансированной финансовой политики. Методология исследования предполагает использование следующих методов эмпирического исследования (наблюдение, сравнение), методов теоретического исследования (восхождение от абстрактного к конкретному), общих методов (абстрагирование и конкретизация, анализ, синтез, индукция, дедукция, аналогия) и др. Актуальность научной проблемы, определенной в статье, заключается в том, что казначейская форма обслуживания бюджетов Украины в основном рассматривается технически и это в большинстве случаев не позволяет применять ее как действенный инструмент реализации сбалансированной финансовой политики государства.

Результаты исследования следующие: рассмотрен теоретический подход к вопросу казначейского обслуживания бюджетов различных уровней; исследовано взаимодействие органов Государственной казначейской службы Украины с распорядителями бюджетных средств и в контексте децентрализации власти; проанализировано выполнение доходов и социальных расходов Государственного бюджета Украины. Оригинальность и практическая ценность исследования заключается в том, что предложено усовершенствование контроля за расходованием бюджетных средств и модернизацию качественного уровня обслуживания органами Государственного казначейства.

Выводы исследования следующие: эмпирически подтверждено и теоретически доказано, что существуют перспективы улучшения казначейской формы обслуживания бюджетов Украины в контексте обеспечения сбалансированной финансовой политики. Результаты проведенного исследования могут быть полезными для финансистов-практиков, представителей академических кругов, студентов и всех, кто интересуется казначейским обслуживанием бюджета.

Ключевые слова: казначейство; казначейское обслуживание; доходы бюджета; расходы бюджета; сбалансированное развитие; финансовая политика.

financier budget management service

Introduction

The State Treasury Service of Ukraine occupies a decisive place in the process of effective management of state and local budgets. Therefore, the consideration of this issue in the context of a balanced financial policy will provide an objective approach to the study of improvement of the treasury form of servicing the budgets of Ukraine. The treasury service system of Ukraine was formed under the influence of constant structural changes in the financial sector. At each stage of development, new preconditions for further improvement and effective management of national government finances are created.

Aim and methodology of research

The study should show how the treasury service of budgets in Ukraine has changed in recent years and its results will allow us to suggest possible ways to improve the treasury service of budgets of different levels in the context of ensuring a balanced financial policy. It is also necessary to consider the issue of improving control over the spending of budgetary funds and modernizing the quality level of service on the part of the state treasury authorities.

The study methodology involves the use of the following methods of empirical research methods (observation, comparison), methods of theoretical research (climbing from abstract to concrete), general methods used both on empirical and theoretical level of research (abstraction and concretization, analysis, synthesis, induction, deduction, analogy) and others.

Literature review, shortcomings and problem statement

During 2015-2021, domestic scientists made a significant contribution to the development of issues of treasury servicing for budgets of different levels in Ukraine. In particular, O. V. Brezhnieva-Yermolenko, N. P. Titkova and T. M. Cherkasova considered the theoretical and practical aspects of a single treasury account functioning as the main account of the state. U. Z. Vatamanyuk-Zelinska offered the improvement of the treasury service system in the field of the state budget management of Ukraine.

M. Hupalovska, A. Demyanyuk and S. Savchuk studied the peculiarities of the treasury control implementation in the budget sphere. L. Ye. Deykalo and A. Yu. Chubak considered the interaction of the Treasury bodies of Ukraine with State Budget managers, and ways to improve. L. Yu. Marchenko in detail studied the implementation of state policy in the field of treasury service of budget funds. O. V. Rubay and M. M. Bohach analyzed the management of financial resources in the treasury system. S. M. Yuriy investigated theoretical issues of information modernization of treasury budget services. It is important for us to study current trends in treasury budget services and consider it through the prism of a balanced financial policy.

Systematization of literature sources and approaches to the treasury form of servicing Ukraine's budgets in the context of ensuring a balanced financial policy showed that most domestic researchers have considered only some directions of budget servicing.

The relevance of this scientific problem solution is that the treasury form of servicing the budgets of Ukraine is mostly considered as a government body carrying out the service of budgets technically, which in many cases does not allow to apply it in the context of ensuring a balanced financial policy, and even more so in the case of effective tool for the state policy implementing. Therefore, we need to establish the quantitative values of the volume of treasury service, in particular, the dynamics of total income of the State Budget of Ukraine, executed in 2016-2020, as well as the dynamics of total expenditure of the State Budget of Ukraine, carried out in 2016-2020. In addition, it is necessary to study change in the balance of single treasury account at the beginning of the month during the last five years and propose effective modern directions for improving of budgets treasury services of different levels in the context of a balanced financial policy.

The main material research

As you know, according to Ukrainian legislation, the State Treasury Service of Ukraine (Treasury) is a central body of executive authority, whose activity are directed and coordinated by the Cabinet of Ministers of Ukraine through the Minister of Finance and which implements state policy in this sphere of treasury service of budget funds, customer funds in accordance with the legislation, accounting of budget execution. The Treasury in accordance with the tasks assigned to him and in accordance with the procedure established by law: summarizes the practice of applying legislation on matters within its competence, develops proposals for improving legislation, acts of the President of Ukraine and the Cabinet of Ministers of Ukraine, regulatory legal acts ministries and submits them to the Minister of Finance in accordance with the established procedure ; provides treasury service of budget funds based on a single treasury account which opened in the National Bank of Ukraine.

It should be noted that the State Treasury Service of Ukraine (SCSU) in the performance of its tasks interacts in the prescribed manner with other government agencies, subsidiary bodies and services established by the President of Ukraine, temporary advisory, consultative and other subsidiary bodies established by the Cabinet of Ministers of Ukraine, authorities local governments, associations of citizens, public unions, trade unions and employers' organizations, relevant bodies of foreign states and international organizations, as well as enterprises, institutions and organizations.

The Treasury policy involves using the government's opportunities to provide taxes and expend the state budget expenditures to regulate the level of business activity and solving various social tasks. The Treasury of Ukraine, established in April 1995 by the Decree of the President of Ukraine as a structure of executive authority, was forced since its foundation to adapt to existing and current mechanisms and methodologies of state budget execution, accounting and reporting, and traditionally support existing relationships with participants in the budget process. At the same time, the Treasury solved two main tasks: ensuring the implementation of the State Budget and management of public resources.

In 1996, the creation of a three-level structure of the Treasury bodies has begun. Its system consisted of the main department of the Treasury and its territorial bodies - the Department of the Treasury in the Autonomous Republic of Crimea, regions, cities of Kyiv and Sevastopol with departments in districts, cities and areas in cities. Each of these levels had full functionality until 2000. The Treasury bodies together with the banks keep records of operations on the execution of the revenues of the State Budget. At this stage, the transfer of funding functions from the sectoral departments of the Ministry of Finance of Ukraine to the Main Directorate of the Treasury is begins. In terms of expenditures, the treasury authorities are transferring funds for expenditures to the accounts of ministries and departments opened in banking institutions. A classical treasury function is being implemented: implementation of the State Budget for expenditures within the limits of revenues to it.

In 1997, the implementation of treasury services of the State Budget for expenditures has begun, the fundamental basis of which is the expenditure by paying for accounts of managers of funds for goods and services provided to them through the State Treasury. This was accompanied by the creation of a legal and economic base to ensure the powers of Treasury in the field of current control over the implementation of budget expenditures.

1998 became final year for translation into the Treasury system of the State Budget execution of funds managers almost all ministries and departments. As of January 1, 1999, the Treasury system had already served about 32,000 budget managers, for whom 70,000 thousand registration accounts are opened in the Treasury bodies. In the same year, a new budget classification and Chart of Accounts for the implementation of state and local budgets were introduced, which became a new step in the development of the treasury budget execution system.

In 1999, the Treasury's system coverage of the budget execution of all managers of the State Budget of Ukraine was completed. This year saw the further expansion of the Treasury functions. In particular, the introduction of treasury services of extrabudgetary funds of institutions and organizations, which maintained at the expense of the State Budget has begun in February, and as of January 1, 2000, 80% of extrabudgetary accounts of budgetary institutions and organizations were transferred to the Treasury. Thus, the necessary preconditions were created for the inclusion of these funds in the State Budget.

Since 2000, extrabudgetary funds of administrators have become part of the State Budget - included in the Special Fund of the State Budget. The decision to consolidate budget funds in the institutions of the National Bank of Ukraine in 2000 was important, and the first stage of the Treasury in achieving this goal begun the transfer of accounts for state budget expenditures from institutions of commercial banks to the National Bank. Consolidation of all State Budget funds in the Treasury accounts in the National Bank of Ukraine made it possible to start performing one of the main functions of the Treasury - more effectively manage the total balance of cash resources - and created preconditions for placing temporarily free funds on the financial market. At the same time, the Treasury bodies remained clients of the National Bank of Ukraine. The operation of the Treasury system remained opaque and closed both to the central level of the Treasury and to society as a whole.

In 2001, the Treasury status was changed: from a bank client, the Treasury actually became a participant in the electronic payment system of the National Bank of Ukraine. It did not entail changes in the department structure, but changed their status. Participants of the NBU electronic payment system have the opportunity to carry out multi -stage control over the accuracy of data at all stages and levels of calculations, to receive daily information in the budget format approved by the annual law in an automated mode. One of the main requirements for the Treasury transition to the participant status in the electronic payment system was the need to develop a new accounting and reporting system that would meet the requirements of the National Bank regarding the construction regarding the construction of accounts structure and the Treasury functionality and goals of the budget process.

With the adoption of the Budget Code of Ukraine in June 2001, for the first time the treasury service of budgets and budget managers was legalized at the legislative level. In addition, the Code contained an important article that enabled the Treasury to conduct a single policy in the process of budget execution.

In 2002, the process of introducing treasury service of local budgets for income and transfer of intergovernmental transfers has begun. This allowed obtaining reliable information about revenues by types of revenues and budgets in real time, to provide reporting data to interested bodies for budget analysis. This year, the process of transition to the NBU electronic payment system at the expense of the central and regional levels of the Treasury was completed by implementing new software.

Since the beginning of 2003, a full-scale process of transferring to the treasury service at the expense of local budgets and their managers has begun, which since January 1, 2004 has covered all its members (more than 12 thousand local budgets and about 55 thousand managers and recipients of funds).

Until 2011, the State Treasury of Ukraine was a government authority of public administration, which operated within the system of the Ministry of Finance of Ukraine. The State Treasury was liquidated by the Resolution of the Cabinet of Ministers of Ukraine dated March 28, 2011 No. 346 “About liquidation of government bodies”. Decree of the President of Ukraine dated April 13, 2011 No. 460/201 “On Approval of the Regulations on the State Treasury Service of Ukraine ” was approved the relevant Regulations and established that the State Treasury Service of Ukraine is the successor of the rights and obligations of the State Treasury of Ukraine and is the central executive authority, whose activities are directed and coordinated by the Cabinet of Ministers of Ukraine through the Minister of Finance of Ukraine. According to the Regulation on the State Treasury Service of Ukraine, one of the main tasks of the STSU is to simplify and improve the services of budgetary funds managers and recipients [8].

In 2014, an automated system (hereinafter referred to as the A S) of the Treasury Execution of the Budgets of the AS “E-Treasury” with a subsystem AS E-treasure, which was created on the basis of AS “Treasury-Revenues” and the Remote Access System “Treasury Client”. The use of general ledger of AS “Treasury-Revenues” provides a single accounting environment and allows you to conduct a unified accounting policy for the implementation of both revenue and expenditure part of budgets at all levels.

The budgetary service system of the domestic treasury continues to be improved, and its functions are expanding. Measures are being taken to standardize and optimize advanced information technologies to modernize and unify treasury procedures and increase the efficiency, transparency and accessibility of public and local financial information. Measures to standardize and optimize advanced information technologies to implement the modernization and unification of treasury procedures and increase the efficiency, transparency and accessibility of public and local financial information are being taken. Therefore, according to S. M. Yuriy, it is expected that implementation of these measures will increase the level of service of budgetary funds managers and recipients; will accelerate the maintenance process and improve the operational control of the budget process; will prevent violation of budget legislation; will allow to introduce modern information technologies and use of communication tools, etc. [11]. There are certain disadvantages in the system of treasury budget execution at all levels of the budget system, as evidenced by the analysis of the consolidated budget of Ukraine in terms of revenues and expenditures. As rightly noted by O. V. Brezhnyeva-Yermolenko, N. P. Titkova and T. M. Cherkasova, the failure of planned indicators and low revenue growth in their studies slowed down the fulfillment of budget expenditures, which negatively affected on socio-economic development. The single treasury account in the budget execution system is a preventive measure to prevent the abuse of budget funds. It is also account that opened for the State Treasury of Ukraine for accounting of funds and settlements in the electronic payments system of the National Bank of Ukraine.

Based on the study, it can be argued that tax revenues in the structure of revenues of the State Budget of Ukraine occupy the largest and most predominant part (79-82% in different years). It is also worth noting that every year tax revenues were performed in a growing trend in absolute terms. Non-tax revenues also tend to increase in absolute terms. In addition, every year the relative magnitude of this indicator structure is growing (in 2016 this indicator was 16.82%, and already at 2020 - 19.79%). Official transfers (from government bodies) in the structure of the State Budget occupy a minor part (within 0,68-0.99%), although they tend to increase in absolute terms. Target funds fluctuated during 2016-2020 in the range of 0.02-3.76%, which indicates on non-uniformity earnings from this type of income. Revenues from capital operations occupy the smallest share in the revenues structure of the State Budget of Ukraine (within 0.01-0.07%).