Банкеръ Weekly

Briefs

INSPECTORS TO ENTER ALL COMPANIES OWNED BY THE STATE

The public financial control becomes obligatory to all companies in which either the State or municipalities hold shares. This is stipulated by the draft of a new law on the public internal financial control that the Government approved on September 23. According to the currently effective regulation, only companies with state or municipal stakes of more than 34% were subject to inspection. If the National Assembly approves the text, all budget organisations (except bodies of the judicial power), state-owned enterprises registered under art. 62 of the Commercial Act, as well as companies in which either the state or a municipal council holds a blocking quote in the capital, including their subsidiaries, will be subject to financial control. Individuals who use budget funds or resources from programs of the European Union will be inspected, too.The new law on public financial control distinguishes auditing from inspection. It also stipulates the establishment of a new structure in the Public Internal Financial Control Agency which will be responsible for the financial inspections. Currently, the same officers are carrying out both the auditing and the inspections which contradicts the European regulations.Internal auditing will be entrusted to individuals with economic or legal background. Auditors who will work within the judicial system will be appointed by the respective administrative directors in accordance with the Law on Judicial Power. On the other hand, auditors in other budget organisations will be appointed by the head of the Public Internal Financial Control Agency or other officers authorized by him.According to the draft, higher fines will be imposed on the financial controllers. In case of impeding an inspection, they will be sanctioned to pay up to BGN2,000. For violation of a document regulating the utilisation of the state or municipal budgets the fine is stipulated in the range of BGN100 to BGN1,000. The same sanction will be imposed in case of non-implementation of the instructions given by a financial inspector.

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