Current status of the public finance management system in the Republic of Belarus

Minsk 6 oblasts + the city of Minsk 118 regions 207,000 square km Population: 9.5 mln (global rank: 93) men – 46.5% women – 53.5% urban population – 77.3% rural – 22.7% Minsk 207,000 square km (global rank: 84) Official languages Belarusian Russian

Production of off-highway dump trucks: global rank 3 Potash production: global rank 3 Dairy product export: global rank 4 10% of the global tractor manufacturing market US Dollars 54.4 bln Human development index rank: 50 GDP HDI Minsk

BUDGET SYSTEM STRUCTURE Consolidated budget of the general government sector Public off-budget funds Social Security Fund National Off-Budget Fund of Civil Aviation National Off-Budget Fund of the Department of Corrections National Off-Budget Fund of Universal Services of the Ministry of Communications Consolidated budget Republican budget Local budgets (total:1,327 budgets) Primary level budgets Village (1,162) Settlements (16) Rayon subordinated towns (14) Base level budgets Rayon (118) City (oblast-subordinated cities) (10) Oblast level budgets Oblast budgets (6) Minsk city budget

Adoption of the republican budget law BUDGETING PROCESS Ministry of Economy Forecast of key economic development parameters National Bank Forecast of key monetary performance parameters Ministry of Financing Republican budget drafting Draft of the main directions of the fiscal policy Government Review of a draft republican budget Submission to the President for review Submission to the House of Representatives for review and approval Adoption of the republican budget law Republican budget Budget fund administrators, oblast-level executive and administrative bodies Proposals according to instructions of the Ministry of Finance

Local budgets Local budgets are drafted on the basis of: Final compilation of drafts of oblast budgets, the Minsk city budget and estimated indicators of consolidated regional budgets, budgets of oblast-level cities Final compilation of drafts of regional budgets, oblast-level budgets and estimated indicators of budgets of rural councils, townships, regional-level cities Review of draft local budgets by relevant local executive and administrative bodies Submission to relevant local Councils of Deputies for approval Adoption of the republican budget law Approval by local Councils of Deputies Local budgets Local budgets are drafted on the basis of: parameters, forecast of economic development, budget provision standards, plans of social and economic development of the administrative unit, own revenues taking into account of deductions from central and local taxes.

BUDGET REVENUE EXECUTION Treasury Single Account Payers Territorial Units of the Treasury (transit accounts) Ministry of Finance (republican budget sub-account) 1 2 3 Payments, other than customs BELARUSBANK Social Security Fund Ministry of Taxes and Duties BELARUSBANK

BUDGET EXPENDITURE EXECUTION THROUGH THE TREASURY SYSTEM 3 4 5 1 Main State Treasury Suppliers Budget fund recipients Territorial Units of the Treasury Application for financing Payment instruction 2 National Bank BELARUSBANK (Accounts of the Treasury local agencies)

DEVELOPMENT OF THE TREASURY SYSTEM OF THE REPUBLIC OF BELARUS 1993 Establishment of the state treasury system TSA introduction 1998-1999 Establishment of the second tier of the treasury system – territorial units of the State Treasury Development of the automated system of state treasury Treasury-based execution of the republican budget, state earmarked budget funds through the TSA 2000-2006 Further expansion of coverage of financial resources (the Union State budgets, Social Security Fund, innovation funds and local budgets) by treasury technologies 2011 Electronic document introduction 2015-2016 Transition to treasury-based execution of public off-budget funds, revenue and expenditures of off-budget funds of individual public bodies Introduction of the centralized automated system of collection and consolidation of budget execution reports Present Expansion of the TSA coverage

STRUCTURE OF PUBLIC FINANCIAL RESOURCES ACCUMULATED IN THE TSA

TREASURY SYSTEM STRUCTURE Total number of treasury staff: 530 Main State Treasury Territorial Units of the Treasury in oblasts and in the city of Minsk Departments of the Treasury Territorial Units Budget execution management Cash revenue and budget commitments management Budget accounting and reporting management Unit for Enhancement of Public Sector Accounting and Reporting 7 128

Key regulation: Law on Accounting and Reporting, No. 57-Z of 12. 07 Accounting and reporting principles Legislation and instructions on accounting and reporting Supervision of accounting Accounting policy Requirements to primary documents and accounting registers General requirements to and contents of reporting Accounting requirements for assessment of assets, liabilities, equity capital, income and losses

Law on Accounting and Reporting No. 57-Z of 12.07.2013 Budget entities Regulations on accounting in budget sector Chart of accounts of budget entities (Ministry of Finance Resolution No. 50 of 22.04.2010) Financial departments Guidelines on accounting for local budget execution by financial departments Oblast- and base-level budgets Chart of accounts of local budget execution (Ministry of Finance Order No. 299 of 14.12.1998) Primary level budgets Chart of accounts of rural councils (USSR Ministry of Finance order No. 95 of 03.04.1987) Treasury Internal regulations of the Ministry of Finance Treasury chart of accounts for budget execution (Ministry of Finance order No. 521 of 31.12.2014) Commercial organizations Regulations on accounting in the commercial sector Non-financial institutions Standard chart of accounts (Ministry of Finance Resolution No. 50 of 29.06.2011) Financial institutions Chart of accounts of banks and non-bank finance institutions (National Bank Resolution No. 506 of 29.08.2013)

IFRS IN THE REPUBLIC OF BELARUS Commercial organizations apply the National Accounting and Reporting Standards: Consolidated Reporting Effect of Foreign Exchange Fluctuations Organization Accounting Policy, Changes in Estimate Assessments, Errors» Banks and non-banking credit and financial institutions apply: IFRS-Based National Financial Reporting Standards ( 24 standards) open joint-stock companies banks non-banking credit and financial institutions insurance organizations Pursuant to the Law on Accounting and Reporting No. 57-Z of 12.07.2013, IFRS-compliant reporting shall be compiled by organizations of public interest: On January 1, 2017, the Republic of Belarus introduces IFRS and explanations to them, as developed by the IFRS Foundation, as a national technical regulation. (Resolution of the Council of Ministers of the Republic of Belarus and National Bank of the Republic of Belarus No. 657/20 of 19.08.2016)

REPORTING FORMS FOR BUDGET ENTITIES Balance sheet Budget estimate execution report Report on execution of estimated capital construction budget (with Annex) Report on execution of estimated revenues and expenditures from income-generating activities of budget entities Report on changes in fixed assets, selected current assets Report on movement of tangibles Report on receipt and use of earmarked state budget funds Report on receipt and use of state off-budget funds Report on use of earmarked and other funds Report on execution of estimated revenues and expenditures of the Fund for a free economic zone development Property shortage and theft report Monthly report on use of funds allocated from the budget Monthly report on use of funds by diplomatic and consular missions of the Republic of Belarus abroad Explanatory note (including information about accounts receivable and payable) REPORTING FORMS FOR BUDGET ENTITIES

BUDGET EXECUTION REPORTING FORMS Budget execution report (monthly, quarterly, annual) Budget execution balance Consolidated report on execution of estimated revenues and expenditures from income-generating activities of budget entities Consolidated report on changes in fixed assets, selected current assets Consolidated report on movement of tangibles Consolidated report on receipt and use of earmarked state budget funds Consolidated report on use of earmarked and other funds Consolidated report on property shortage and theft in budget entities Information about arrears as of end of reporting period Explanatory note Local budget execution reports

Main State Treasury Reports Republican budget execution balance Republican budget execution report (revenues, expenses, sources of financing) Local budget execution report (revenues, expenses, sources of financing) Consolidated budget execution report Information on liabilities of republican and local budgets (accounts receivable, accounts payable, overdue accounts payable) Summary of individual forms submitted by administrators of republican budget funds Aggregate local budget execution balances Main State Treasury Reports

ORDER OF PROCESSING LOCAL BUDGET EXECUTION REPORTS Main State Treasury Oblast Financial Department Oblast Public Health Department Oblast Hospital Rural councils Regional Financial Department Regional Department of Education, Sports and Tourism Kindergartens Schools Athletic and rehabilitation centers

ORDER OF PROCESSING THE CONSOLIDATED BUDGET EXECUTION REPORT Consolidated local budget execution report Republican budget execution report Brest Oblast budget execution report Vitebsk Oblast budget execution report Gomel Oblast budget execution report Grodno Oblast budget execution report Minsk city budget execution report Minsk Oblast budget execution report Mogilev Oblast budget execution report

Thank you!