Audit of SPFU financial statements – understatement of financial assets and equity by UAH 16.5 billion revealed
On May 27, the Accounting Chamber adopted the Report* on the results of the financial audit of the State Property Fund of Ukraine for 2024. The person responsible for the control measure is – member of the Accounting Chamber Hennadiy Plis.
This is the first financial audit of the State Property Fund of Ukraine conducted in accordance with international standards**.
The audit results revealed an understatement in the consolidated financial statements of the Fund's total amount of long-term financial investments and equity by almost 16.5 billion hryvnias. This occurred due to the failure to take into account the indicators of enterprises managed by the Fund and became the basis for the auditors to express a negative opinion. As emphasized by the member of the Accounting Chamber, Hennadiy Plis, The Fund did not form and submit to the Ministry of Finance of Ukraine and the Ministry of Economy of Ukraine consolidated financial statements for over two thousand public sector entities under its management. This complicated control over state assets.
A significant identified deficiency is the fact that the SPFU carried out the revaluation of fixed assets of one group at different times. This affected the completeness and reliability of the disclosure of information in the consolidated reporting of the Fund and its controlled entities.
«Currently, the reporting reflects the assets of one group, valued using different approaches: revalued and non-revalued. For example, the regional branch of the State Property Fund for Vinnytsia and Khmelnytskyi regions revalued a building located in Vinnytsia at UAH 15.6 million, while the multi-storey building of the State Property Fund in the center of Kyiv was valued at one hryvnia," – gave an example Hennadiy Plis.
The auditors also noted in the Report that the following important information was not disclosed in the notes to the financial statements:
- data on the State Property Fund's accounting policy;
- restrictions on asset ownership;
- transactions with related parties;
- list of controlled entities, etc.
The absence of this information, as well as the Fund's unified accounting policy, causes deviations in reporting data and makes it impossible to fully assess the financial condition of the SPFU.
Considering the shortcomings and violations identified during the audit, the Accounting Chamber provided a number of recommendations, in particular:
The State Property Fund of Ukraine:
– ensure full disclosure of information on financial investments in all enterprises under the management of the State Property Fund;
– prepare and submit consolidated reporting in accordance with current regulations, develop and implement a single accounting policy, conduct an appropriate revaluation of assets and provide all mandatory information in the notes;
The Ministry of Finance of Ukraine and the Ministry of Economy of Ukraine:
– summarize and analyze the completeness and timeliness of submission of consolidated financial statements by central executive bodies.
The Acting Head of the State Property Fund of Ukraine, Ivanna Smachylo, who was present at the meeting, agreed with the recommendations of the Accounting Chamber. At the same time, the Head of the SPFU emphasized the presence of systemic problems related to the deadlines for reporting and the insufficiency of the methodological base.
* The corresponding Report was formed according to the updated reporting form on the results of financial audits, which meets international standards. Currently, such forms of the Report are being tested by the Accounting Chamber.
** The control event was held with the support of Component 5 of the EU4PFM Project (EU Public Finance Management Support Programme for Ukraine).
Report on the results of the financial audit of the State Property Fund of Ukraine
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