Accounting and Financial Control in Budgetary Institutions

Statistics of violations in the budgetary sphere revealed by the Federal service of the financial and budgetary supervision in 2013-2015 shows that the number of accounting errors committed by budgetary organizations have risen significantly in comparison with previous years. At the same time, there was a clear decline in the quality of state financial control and the effectiveness of control bodies. The aim of this research is to review theoretical and methodological aspects of budgetary accounting and state financial control and provide recommendations for improving the organization of accounting and control in budgetary institutions. This paper summarizes the changes of Russian public sector regulation, which took place in 2010-2015 and evaluates results of budgetary reforms. The empirical research is based on internal documents of municipal budgetary institution (Zavolzhie public library system) and publically available documents of municipal control bodies. Additional data were collected from financial statements and accounting documents of Zavolzhie public library system. Using this information, author analyzed the organization of accounting in institution and developed the methodology of financial control. After testing some of the control procedures in Zavolzhie public library system, the author found that most of accounting violations took place because of wrong use of the codes of Classification of general government operations, which resulted in improper spending of funds. In the final part of the study, recommendations for correcting accounting errors are provided in order to help accountants to avoid making the same mistakes in the future. In addition, the author suggests measures for the internal control system implementation in Zavolzhie public library system and improvement of the library’s charter and accounting policy.