Treasury of the Republic of Kazakhstan kk_mfrk@minfin.gov.kz kazna.astana@minfin.gov.kz Kishinev, Moldova, June 2016

Information on the Treasury Slide 1 In 1994, pursuant to the Decree of the President of the Republic of Kazakhstan “On Establishment of the Treasury of the Ministry of Finance of the Republic of Kazakhstan”, under the Ministry of Finance the Chief Directorate was established for the purpose of improvement of financial resource management and exercise of control over execution of the state budget. In 1996, the Treasury Single Account was opened with the National Bank of the Republic of Kazakhstan In 1996, an agreement was signed with the International Bank for Reconstruction and Development on the allocation of loan funds for modernization of the treasury system. From 2001, on the basis of ORACLE software gradually the integrated treasury information system (IT IS) was implemented. From 2004, IT IS functions in the territory of the whole country. From 2012, the “Treasury – Client” system is implemented. The Treasury Committee is an agency of the Ministry of Finance of the Republic of Kazakhstan. The Treasury Committee includes the central administration, 16 departments of oblast and of the capital, and 188 district (municipal) treasury offices. The structure of the Treasury Committee includes the IT office, which coordinates work with territorial treasury bodies, with clients and contractors in connection with maintenance of information systems.

Functions of the Treasury Slide 2 1) Execution of the republican budget and local budgets, the National Fund of the Republic of Kazakhstan; 2) Preparation and approval of the consolidated plan of commitment-based funding, consolidated plan of receipts and financing based on payments of the republican budget; 3) Allocation of amounts of receipts between the republican and local budgets, the National Fund of the Republic of Kazakhstan and countries that are members of the Eurasian Economic Union; 4) Management of budget money, issuance of securities of the Government of the Republic of Kazakhstan in the domestic securities market and making payments related to servicing and repayment of the internal debt of the Government of the Republic of Kazakhstan, organization of events related to issuance of government securities in the foreign capital market; 5) opening, maintenance and closing control cash accounts and accounts stipulated in the Budget Code; 7) Registration of civil transactions of public institutions; 8) Making payments and money transfers in national and foreign currencies under commitments of pubic institutions and entities from the quasi-public sector; Accounts are opened for quasi-public sector entities that receive budget funds. Clients are served free of charge, additional IT services are not provided. Training of personnel is done by treasury bodies at workplaces (studying the budget legislation, regulatory legal acts, users’ guides, etc.), workshops are conducted for clients

Стратегическое планирование Slide 3 A strategic plan of a state body is developed every three years for a five-year period on the basis of strategic and program documents of the Republic of Kazakhstan, forecast of socioeconomic development of the Republic of Kazakhstan. The Treasury Committee as an agency of the Ministry of Finance does not have its own Strategic plan. The Strategic Plan of the Ministry of Finance is cascaded down to each structural subdivision with assignment of responsibilities. The Strategic Plan of the Ministry of Finance of the Republic of Kazakhstan determines strategic areas, targets and target indicators of the Treasury Committee closely related to budget funds needed to achieve results. For example: Strategic area 2. Modernization of the system for public asset and finance administration. Strategic goals. Goal 2.1. Improvement of efficiency of public asset management. Goal 2.2. Creation of favorable business environment and reduction of administrative barriers for businesses and population. Target indicator 2.2. Reducing the time needed to process requests to register a civil transaction (in 2016 - 8 hours, in 2017 - 7 hours, in 2018 and 2019 - 6 hours.)

Main goals of these changes Значительные реформы Slide 4 ## Significant changes in treasury operations from the moment of creation Main goals of these changes 1 Opening of the Treasury Single Account Budget monitoring, cash management 2 Mandatory registration of agreements with treasury bodies Exclusion of payables 3 Implementation of the integrated treasury information system (ITIS) Enhancement of treasury control over execution of budgets at all levels, carrying out transactions in real time mode, utilization of the single budget classification and single Chart of accounts. 4 Opening of accounts for quasi-public sector entities Control over spending of funds allocated for implementation of budget investment projects and state assignment 5 Implementation of the “Treasury – Client “ information system Reducing time needed to process accounts payable and requests to register a civil transaction 6 Consolidation of financial statements on accrual basis at the level of the republican and local budgets Getting information on assets and liabilities of the public sector of the Republic of Kazakhstan 7 Transition to the new version of Oracle Applications R12 software Possibility of integration with other sub-systems of the Ministry of Finance of the Republic of Kazakhstan and with information systems of ministries and departments (е-government, e-minfin, e-public procurement, etc.)

Будущие реформы и сложности Slide 5 From January 1, 2017 года вступит в действие новый Бюджетный кодекс of the Republic of Kazakhstan. It is assumed to strengthen the status of the Treasury as an authorized body responsible for execution of budgets at all levels with introduction of new functions; Gradual implementation of financial capabilities of the new level of local self-governing bodies; Granting the right to place temporarily free budget fund into deposit at banks of the second tier to ensure liquidity in the Treasury Single Account; Utilization of the procedure for returning to the budget unused cash balances from cash control accounts of quasi-pubic sector entities; expansion of application of financial statements at the stage of budget execution (for example, from January 1, 2017, preparation of reports on receivables and payables of public institutions on accrual basis). Gradual preparation of the accrual-based budget by means of preparing forecasted financial statements on the basis of accurate and audited by public auditors budget and financial reporting of the treasury. Improvement of sustainability of the fiscal system and budget openness by means of implementing an accrual budget through disclosure of information on the full range of financial results in the budget and financial reports, and not only on cash consequences.

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