Improving public sector entities reporting in terms of transparency of the budget process

Abstract

In the context of the declared state policy on openness and transparency of the budget process, there is a need to improve public sector entities reporting as a key information base on state budget expenditures. Current reporting forms of public sector entities do not reflect information on the types of expenditures (direct and general production), and do not contain information on the cost price of public services financed under the budget program. The article substantiates the expediency of making changes in the forms of financial reporting of public sector entities by disclosure of information on expenditures in terms of direct and general production expenses. This will reflect the use of public financial resources and will establish a relationship between the use of budget funds to pay for public services (direct expenses) or maintenance of institutions (general production expenses). At the same time, it is proposed to supplement forms № 2-ds and № 5-ds with the section “Cost price of sold products, works, services”, which will reveal data on the actual cost price of public services as a key indicator that retransmits public finance management results and their compliance with objectives and expected result of the budget program and state policy in the relevant field. The proposed approach to modernization of disclosure of reporting information will establish methodological integration of conceptual provisions of NP(S)АS 135 “Costs” with forms of financial and budgetary reporting, will promote the implementation of the declared principles of transparency in the budget process, and ensure compliance with the program-target method establishing the relationship between the use of budget funds and performance of public sector entities.