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6.8. Competition Policy - Immediately after the elections, all mainstream political parties, including the ruling...


6.8. Competition Policy



As recommended by the EC’s DCFTA Preparedness Assessment, GoG drafted a Comprehensive Strategy in Competition Policy. The aim of GoG as demonstrated in the draft Comprehensive Strategy and Operational Programme is to further develop legal and institutional framework in the competition area in line with the EU and international standards. The draft strategy and programme were agreed with the EC and adopted by the GoG.

The following implementation steps started by the Government of Georgia:

Establishment of Independent Competition Authority

(The Agency for Free Trade and Competition) - The Government of Georgia prior to the formal adoption of the Comprehensive Strategy and Operational Programme started the implementation of institutional reform.

Respective legal amendments to Georgian Law on Free Trade and Competition were adopted and the new competition agency (CA) as an independent legal entity of public law was established, which is no longer under the Ministry of Economy and Sustainable Development. The CA became legally organized in such a way to ensure financial autonomy and decision-making autonomy. The budget of the CA has been increased.

The Agency for Free Trade and Competition gradually increases the stuff, for that reason the competitive selection process has been conducted to identify appropriate candidates.

Drafting the Competition Framework Law

- In order to bring the competition legislation in line with international standards, drafting of Competition Framework Law has started. Active consultations are held with all GoG stakeholders. This goes beyond the EU preconditions for starting negotiations.

Enhancement of Human Capacity Building

- The Agency for Free Trade and Competition has started a long-term, systemic, structured assistance project with SIDA, Swedish Competition Agency and Estonian Competition Authority. A number of meetings have been held in the framework of this cooperation and further steps have already been planned in this regard.

One of such meetings was held in Sweden on the 27-29th of September with the participation of the Swedish competition authority, SIDA and Georgian side. Georgian side was represented by the representatives of the Agency for Free Trade and Competition and the advisory group of the Prime-Minister. In the scope of the meeting the perspectives of the future cooperation were identified between the Swedish competition authority, SIDA and the Georgian authorities. Georgian side got familiarized with the practical functioning of the Swedish competition authority.

The GoG, together with the Swedish and Estonian competition authorities works on joint plan of actions for strengthening capacity of relevant state officials.

In order to assist the institutional and administrative strengthening of the state institutions involved in competition policy, the GoG has requested a TAIEX workshop on competition policy. The workshop was held in November, 2010 in Tbilisi. All the state institutions concerned participated in the abovementioned workshop.

To ensure strengthening of the administrative and institutional capacity of the institutions to be involved in DCFTA negotiations and sufficient knowledge of the EU and international competition related legislation and best practices, the GoG took the following steps:


















Capacity building and institutional strengthening of the Agency for Free Trade and Competition, as well as of all the institutions concerned, will be held on a permanent basis.

6.9. Public finance



In March 2010, Coordination Council for the implementation of the 2009-2013 Public Finance Management Reform Strategy was established by decree #241 of the Minister of Finance of Georgia. The decree defined the composition and the charter of the Coordination Council. According to the decree, all relevant representatives of the Ministry of Finance of Georgia (senior and middle-level decision-making level) take part in the work of the Coordination Council along with relevant members of the Parliament of Georgia, representatives of the Chamber of Control, State Procurement Agency, civil society organisations, relevant international organisations and media. One key objective of the Coordination Council is to monitor the implementation of the 2009-2013 PFM Reform Strategy and of associated annual action plans. PFM-related discussions and works are implemented on the ongoing basis. Outcomes and progress is shared with relevant stakeholders through media outlets, dedicated workshops and thematic outreach activities, meetings with target stakeholder audiences, and on-site visits.

6.9.1. Budgeting



For the implementation of program budget exercise, Government approved decree No284 on March 10, 2010 on “program budgeting implementation plan”. The decree was prepared in accordance with the Budget Code to ensure introduction of program budgeting process. The decree identifies program budget activities for 2010, 2011 and 2012. The Ministry of Finance of Georgia is the key responsible body in terms of supervision and coordination of the implementation of the plan. In accordance with the mentioned plan the program budgets for additional 3 line ministries (1.Ministry of Corrections and Legal Assistance, 2. Ministry of Agriculture, 3.Ministry of Environment and Natural Resources) were prepared. 2011 program budget documents along with final draft of 2011 Annual Budget Law were submitted to the Parliament of Georgia in December 2010.

The Ministry of Finance, in close cooperation with line Ministries prepared 2011-2014 Basic Data and Directions (BDD) document in a new format, which is consistent with the new Budget Code. Revised BDD document reflects the medium-term priorities of the Ministries and spending agencies and goals, outputs and funding for the programs and activities targeted at achieving those priorities. In addition, BDD includes aggregate level information including expenditure and staff ceilings for each spending agency of the State Budget. The document was submitted to the parliament along with the final draft state budget of Georgia for 2011.

In the Q1 2010, along with 2009 state budget execution report, budget execution reports of large LEPLs and self-governing units were also submitted to the Parliament of Georgia. During the preparation of these reports, the Budget Department was actively collaborating with the LEPLs and local self-governments’ representatives. Compared to 2009 the number of LEPLs, providing budget execution reports to the Ministry of Finance increased from 27 to 112. Correspondingly, 3, 6 and 9 month 2010 budget execution reports of 112 LEPLs were submitted to the Parliament of Georgia along with the state budget execution reports.

6.9.2. Sound management and control of public finances



The Georgian Public Sector Accounting Reform is conducted by the Treasury Service of the Ministry of Finance of Georgia. The following steps have been taken in this respect:



















6.9.3. State Internal Audit and Inspection



In March 2010, the Parliament of Georgia adopted the Law on State Internal Audit and Inspection. The law covers the rule, principles, general methodology and standards, authority, organization, independence guaranties and issues related to elaboration, development and implementation of internal state financial control, internal audit and inspection. It also concerns establishment of internal audit units in public sector to achieve formation of effective and efficient financial management and control system, to provide reasonable assurance that the goals of the institution have been achieved, through:













The law also regulates the organization of the internal audit units, their tasks and activities, managerial accountability, rights and duties of internal auditors, execution of internal audit and financial management and control. The key objective of the law is to develop/promote internal audit principles and practice according to the best international standards.

In May 2010 LEPL National Centre of State Internal Control (“the Centre”) was established. The key mission of the Centre was to prepare draft legislation and methodological instructions for conducting internal audit by the internal audit units of the ministries.

Centre elaborated internal audit standards and methodology that later were adopted by the Government’s regulations, also Code of Ethics and guiding principles for internal auditors. These documents are key documents in terms of implementation of internal audit functions.

As Centre completed works on its core objectives it was deemed appropriate to abbolish and replace it by the Council under the Government regulations (decree #345, November 9, 2010). The Council is responcible to improve and to further harmonize internal audit functioning in the country. Accordingly, internal audit units have to annually report to the Council.

The charter of the Council that was adopted by the Government’s decree regulates the composition of the Council, its activities and main directions, functions, decision-making rules and other issues. The Council has secretariat, staffed by the employees of the Ministry of Finance of Georgia.

6.9.4. Chamber of Control



2009-2011 Strategic Development Plan (SDP) of the Chamber of Control has been updated and covers 2010 - 2012. SDP has been presented to the Donor Coordination Meeting to help identify fields for future cooperation.

On the basis of 2009-2011 Strategic Development Plan, 2010-2011 Capacity Development Plan (SDP) has been developed. The CDP defines existing needs and activities to be carried out for the fulfilment of undertaken tasks and responsibilities.

The Memorandum of Understanding was signed between the Chamber of Control of Georgia (CCG) and the Swedish National Audit Office (SNAO) that is to contribute to further development of the CCG. Within the framework of Institutional Development Cooperation project, the two Supreme Audit Institutions cooperate in the fields of financial audit, performance audit, internal and external communication, IT strategy and management of Supreme Audit Institution (SAI).

The Memorandum of Understanding was signed between the CCG and the Latvian State Audit Office (LSAO) to facilitate strengthening of cooperation between the two SAIs. Within the framework of the mentioned cooperation, the agreement was signed with the purpose of conducting joint pilot audits of three ministries according to the new financial audit manual.

The Memorandum of Understanding was signed between the CCG and the Romanian Court of Audit (RCA) to facilitate transfer of knowledge and professional experience in the field of audit of state financial resources.

In the framework of the Chamber of Control of Georgia support project, the CCG continues cooperation with the German International Cooperation Organization (GIZ). The project provides support to develop performance auditing capacity and to bring the legal framework in line with internationally accepted standards.

The development of performance audit manual is supported by the German GIZ.

In the framework of "Support to the Chamber of Control" project, GIZ provides performance audit seminars, and working meetings led by the German experts and long-term study visits/on-the-job training of Georgian auditors in Germany.

 

The CCG cooperated with SIGMA on development of training strategy principles and on preparation of annual report of the state budget execution.

In the framework of Institutional Development Cooperation project with the SNAO, the financial audit manual has been developed that is in line with modern international standards and includes planning, testing, reporting, quality control and result evaluation stages. In the framework of the same project, CCG IT strategy has been developed and approved, and CCG Communication policy document has been developed.

In the framework of Institutional Development Cooperation project with the SNAO, three pilot audits have been initiated. They consist of pre study, main study and reporting stages. The pre study phase has been finalized in 2010 and the main study phase started. Together with the pilot audits, performance audit manual is under development in line with internationally accepted standards.

Within the framework of the agreement signed between the CCG and the LSAO, Latvian colleagues conduct on-the-job training through pilot audits at the Ministry of Labour, Health and Social Affairs, the Ministry of Education and Science, and the Ministry of Regional Development and Infrastructure.

The Code of Ethics has been developed in accordance with the ethics standards accepted by the International Organization of Supreme Audit Institutions (INTOSAI). Its main purpose is to facilitate the development of a new audit service oriented on the provision of highly qualified expert services to the relevant officials and bodies.

The CCG Tbilisi and Kutaisi offices have been renovated and equipped
2014-07-19 18:44
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