The VAKS audit confirmed the reliability of the reporting, but revealed a regulatory gap in the accounting of collateral funds
The financial and budgetary reporting of the High Anti-Corruption Court for 2024 generally fairly reflects its financial condition, performance, and cash flows. However, there are some shortcomings related to internal control, regulation of collateral accounting, and accounting for fixed assets. This is stated in the Report* on the results of the financial audit of the High Anti-Corruption Court for 2024, which was adopted at the meeting of the Accounting Chamber on May 27. Responsible for the audit – member of the Accounting Chamber Kyrylo Klymenko.
The audit covered the assets of the Ukrainian Academy of Sciences worth almost UAH 3.9 billion and cash expenditures in the amount of over UAH 352 million. The Accounting Chamber established that the formation of the VAKS reporting was carried out in accordance with the national provisions (standards) of accounting in the public sector, as well as regulatory legal acts regulating the preparation of budgetary and financial reporting.
At the same time, the auditors revealed the lack of regulation of certain regulatory legal acts relating to accounting for bail funds deposited by a procedural court decision by suspects, accused or other persons. Thus, over UAH 3.6 billion of bail funds accounted for on VAKS deposit accounts are reflected in the reporting as monetary assets and at the same time — as current liabilities’. Although this approach is in line with the requirements of the Procedure for Applying the Chart of Accounts in the Public Sector, it does not meet the requirements of other legislative acts, which is a systemic problem.
In addition, the audit found violations in accounting for fixed assets of the Accounting Chamber, which led to overestimating the amount of their depreciation by 353.8 thousand UAH and incorrect classification of assets with a total value of 2.4 million UAH.
Also internal control over the inventory, its documentation, and the use and preservation of property in the Accounting Chamber must be improved.
Audit of the Accounting Chamber also testified that the «IS-pro» system, which is used by the VAKS for reporting, due to the lack of proper settings, does not provide correct automated formation of financial reporting. As a result, financial reporting is actually compiled manually – in Excel spreadsheets, which increases the risk of errors.
«The quality of the work of the Supreme Court of Justice of Ukraine not only as a judicial institution, but also as a body of state power, determines the trust in the administration of justice by this institution. The Accounting Chamber is the only external auditor in accordance with the legislation that can audit the Supreme Court of Justice of Ukraine. In contrast, other anti-corruption bodies have separate audit bodies defined by law. Therefore, this is an important and responsible role for us, – summed up Kyrylo Klymenko.
According to the results of the audit, the Supreme Court of Justice of Ukraine independently eliminated some of the violations amounting to over 2.4 million hryvnias. At the same time, in order to eliminate the remaining identified shortcomings, the Supreme Court of Justice of Ukraine and the Ministry of Finance of Ukraine were given 10 recommendations, in particular:
– improve the regulatory framework in the field of accounting, in particular, develop a clear procedure for accounting for funds received on special deposit accounts of courts in the event of the use of collateral as a preventive measure;
– ensure proper property management, including its accounting, preservation and effective use;
– improve the procedure for accounting for fixed assets in accordance with current standards;
– strengthen internal control, especially regarding the timely conduct of inventory, the correctness of its registration, as well as control over the preservation of property;
– set up the system «IS-pro» to ensure correct and automated formation of financial statements, etc.
The Chair of the VAKS, Vira Mykhailenko, who was present at the meeting, thanked the institution for its systematic interaction and emphasized that the remarks identified by both the previous and the current audit will be taken into account by the VAKS in its work. The Head of the Accounting Chamber Bogdan Kryklyvenko also noted that the materials of the Audit Chamber's audits are of interest to international partners, who also analyze the court's activities.
The Report and decisions of the Accounting Chamber adopted at the meeting will be sent to the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, the Ministry of Finance and the Accounting Chamber, as well as published on the Accounting Chamber's website.
*The report was prepared according to the updated reporting form on the results of financial audits, which meets international standards. Currently, such approaches to the preparation of Reports are being tested by the Accounting Chamber.
Report on the results of the financial audit of the High Anti-Corruption Court
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