In order to reduce shadow economy, strengthen the monitoring for construction progress and rational use of budgetary funds, the Ministry of Finance proposes implementing treasury monitoring of public procurement for construction. This was reported by the Minister of Finance Bakhyt Sultanov at the Government meeting chaired by Prime Minister Bakytzhan Sagintayev.

The Minister states that the shadow economy in Kazakhstan, according to official data from national statistical authorities, is no less than 20% of GDP. One of its main components are crimes related to expenditure of budgetary funds during public procurement by cashing through fake enterprises. At the same time, third of the amount of allocated funds accounts for “construction” and “trade”.

The lion’s share of budget legislation and public procurement legislation violations falls on construction. According to the SRC in 2016, out of 380 criminal cases 115 fall on construction, which is 30.2%.

In order to eliminate above mentioned risks, treasury monitoring for public procurement for construction is implemented, which ensures transparency of payments, completeness of tax payments, construction quality control, purposeful use of budgetary funds, and control of local content.

“The mechanism of treasury monitoring of public procurement for construction is developed according to discussions with state bodies, business-community, international practical experience and current mechanism of control of quasi-state and banking sectors,” – B. Sultanov noted.

For the first time in practice, based on international experience, there will be involved services of a Supervisor (engineering company) on project management, who not only monitors the construction quality, but also the validity of total expenditure.

This year the mechanism will be tested in three regions (Astana city, Akmola and Karaganda regions). There was approved a Road Map for implementing treasury monitoring. Based on results of implementing the pilot project, there will be developed the amendments to the legislation for normative consolidation of treasury monitoring of public procurement for construction, the Minister concluded.

Recall, the Head of State in his Presidential Address “Third Modernization of Kazakhstan: Global competitiveness” outlined the key task to cardinally increase efficiency of budget spending.

www.primeminister.kz

Published: 28 February 2017

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