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The Accounting Chamber completed the financial audit of the State Nuclear Regulatory Inspectorate of Ukraine for 2019, based on the results of which is provided a modified (conditionally positive) conclusion on financial and budgetary reporting and compliance with the requirements of current legislation.
The purpose of the audit was to verify, analyze and assess the correctness, completeness of accounting, reliability of financial and budgetary reporting, establishing the actual state of affairs on the use of State Nuclear Regulatory Inspectorate of Ukraine's funds from the state budget under the program "Guidance and management in the field of nuclear regulation," compliance with the regulations of the use of budget funds. Specialists of the Accounting Chamber also assessed the management of financial resources and the state of internal control in the inspection.
The auditors focused on non-financial assets of the balance sheet, labor costs, use of funds by the real sector, and off-balance sheet accounting. The audit also assessed the acceptability of the accounting policy.
The auditors believe that the inspectorate's financial and budgetary statements generally accurately reflect its financial position, financial performance, and income and expenses for the period. State budget funds directed to the management and administration in the field of nuclear regulation were used for their intended purpose, following the law on the state budget. The State Nuclear Regulatory Inspectorate of Ukraine conducted financial and economical operations following rules governing the use of budget funds.
Simultaneously, the State Nuclear Regulatory Inspectorate of Ukraine's financial and budgetary reporting for 2019 revealed a number of significant but not comprehensive distortions. Deficiencies in labor costs were found, as well as violations in off-balance-sheet accounting. It is established that in 2019 the State Nuclear Regulatory Inspectorate of Ukraine did not organize the system of internal control and audit at the proper level and in the manner prescribed by the law. Organizationally and functionally, these systems began to be created only in early 2020.
The auditors identified significant risks of material misstatement of the financial statements as changes in the initial cost of property, plant, and equipment and their depreciation, as well as substantial balances of assets in safekeeping in off-balance-sheet accounting at the end of the reporting period. Less critical risks are the significant balances of leased property, plant, and equipment at the end of the reporting period and increased inventories.
The audit covered UAH 74.6 million allocated to the State Nuclear Regulatory Inspectorate of Ukraine for management and administration in nuclear regulation. It was conducted following the requirements of the International Standards of the Supreme Audit Institutions. Member of the Accounting Chamber Iaremchuk IM was leading the audit.
The report and decisions on the financial audit results will be published on the Accounting Chamber's official website.
It is worth mentioning that the Accounting Chamber previously conducted audits of the efficiency of the use of state budget funds allocated to the State Nuclear Regulatory Inspectorate of Ukraine to ensure the state policy in the field of safety of nuclear energy use. The Accounting Chamber completed the preliminary audit in April 2018. To eliminate the shortcomings identified by it, the State Nuclear Regulatory Inspectorate of Ukraine developed and approved the appropriate action plan and informed the Accounting Chamber every quarter about its implementation. As a result, 7 out of 8 recommendations were implemented. The shortcomings in the accounting of international technical assistance, which were highlighted in the financial audit, remained in the implementation stage.
