Summary

In the 90s of the 20th century, Georgia was able to gain independence for the second time. Throughout its 70-year history, the country's economy was actually managed only centrally, and Georgia formally participated in its formation. Accordingly, at the end of the 20th century, Georgia faced without mechanisms and adequate institutions for the formation of economic policy, which is necessary for the independent state. Integration of the country in the world system, the formation of the functions of the state, are directly related to the proper activity of the higher authorities, implementing state financial and economic control.

In the article, is studied financial control at the state level, is analyzed the activity of the State Audit Office of Georgia and The main disadvantages that are intersect in terms of financial control of budgetary institutions, have been identified and recommendations are given for solving negative aspects.

The main aspects of state financial control and its related issues, on the territory of Georgia, are defined by the Constitution of Georgia and by the Budget Code.

In the article is discussed about the State Audit Office of Georgia - the highest institution implementing state financial control in the country. The main goal of the activity of the State Audit Office, is to protect the legality of the use of state funds and to improve the management of public finances.

In 2021, three interagency compliance audits were carried out by the State Audit Office of Georgia. The interagency compliance audit was formed in the State Audit Office in 2018. In contrast to ordinary compliance audit, an interagency compliance audit includes checking more than ten budgetary organizations, which is concentrated on one agency. The formation of interagency compliance audit, is an important innovation in the budget control system of Georgia, as the benefits received, as a result of the audit and the number of audited organizations, are increasing, and also, the number of conducted audits is decreasing.

From the study of the activities of the State Audit Office of Georgia, for the years of 2018-2021, it can be said, that the inspection of the ministries by the main controlling institution, is limited only to conducting a financial audit. Effectiveness and compliance audits by the State Audit Office, are carried out only in legal entities, in the jurisdiction of ministries and self-governing units. Despite the fact, that the internal audit departments, of the ministries carry out the above mentioned audit inspections, their recheck must be carried out by the State Audit Office.

The number of negative opinions, issued by the State Audit Office after the implementation of financial audits, shows the significant problems in financial accounting in the public sector. In 2020, 45% of the opinions from the financial audits, conducted by the Office, were negative. Out of 63 financial audits, conducted by the State Audit Office in 2018-2021, no significant inaccuracies were revealed in only 1 audit and an unconditional opinion was expressed. The Office, should significantly strengthen the control over the fulfillment of the given recommendations, in order to, eliminate the shortcomings in the financial accounting of budgetary institutions.

An important problem is the fact, that a significant part of the recommendations given by the State Audit Office remains unfulfilled. In 2018-2021, 17% of the recommendations given by the State Audit Office, were partially fulfilled and 9% were not fulfilled. The State Audit Office, should improve its activities in this respect, so that, the issued recommendations not remain only on paper and to have real results.

The positive fact is that in 2021, the number and fulfillment of recommendations, given by the State Audit Office, increased significantly. The mentioned fact shows, the institutional strengthening and importance of the Office.

In order to, overcome the existing problems in the financial control system of Georgia, it is important, to continue research in future, in terms of general state financial control. It is necessary, to carry out studies about the effectiveness of the activities of the financial control organizations of Georgia, by evaluating the actual results and comparing them with, the data of previous periods, in order to, highlight the dynamics, how the existing defects are being eliminated in this field and the innovations in world practice are being introduced, which in total, will contribute to the recovery of the country's financial sphere.

Keywords: Economic policy; Financial system; Financial control; Audit; Controlling authority.