The activity of the Chamber of Accounts in 2011 was carried out in accordance with legislative acts in effect, approved work plan and in compliance with the requirements of other relative normative documents.
 
The report emphasized the successful results such as maintaining macroeconomic stability, achieving more intensive development of non-oil sector, significantly increasing the volume of the resources directed to the economy from all financial sources on the account of improving investment environment, strengthening the production capacity of the actual sector, significantly increasing the volume of the country’s currency reserves despite the ongoing economic tension in most countries due to the global  financial-economic crisis.

It was stressed that all of these ensured enforcement of the financial capacity of the country, as well as effective utilization of the increasing financial capacity, more effective and favorable use of the actual resources, and the achieved strategic targets conditioned strengthening the financial discipline, more organized and flexible organization of the public financial control.

It was noted that under such conditions effective external public finance control should support more flexible execution of the fiscal policy and maintaining financial stability, as well as creates condition to follow the requirements of the legislation in management of the budget resources during the process of drafting and execution of the budgets (classification) of state budgets  and extra budgetary  state funds, efficient and reasonable use of them, as well as eliminating gaps and errors in the protection the financial discipline in separate budget organizations.

It was stressed the Chamber of Accounts of the Republic of Azerbaijan as the external state financial control institution defined its priority tasks as more strengthening the financial discipline in credit managers, conducting pressing measures in eliminating abuse of budget resources and the cases of corruption law violations, as well as expansion of the activity in conducting post financial-budget control activities. During the reporting year the Chamber of Accounts paid special attention to more efficient organization of financial-budget control activity and qualitatively conducting control activities.

In accordance with the execution of functions of the Chamber of Accounts determined by the legislation, the following indicated opinions in the area of expert analytic activity in 2011 were prepared and presented to Milli Majlis of the Republic of Azerbaijan:

• Opinion to the draft Law of the Republic of Azerbaijan “On the execution of the state budget of the Republic of Azerbaijan in 2010” and to the annual report on the execution of the budget;

• Opinion to the draft Law of the Republic of Azerbaijan “On making changes to the Law of the Republic of Azerbaijan on the State Budget of the Republic of Azerbaijan in 2011”;

• Opinion to the draft Law of the Republic of Azerbaijan “On making changes to the Law of the Republic of Azerbaijan on the Budget of the State Social Protection Fund of the Republic of Azerbaijan in 2011”;

• Opinion to the draft Law of the Republic of Azerbaijan “On the state budget of the Republic of Azerbaijan in 2012”;

• Opinion to the draft Law of the Republic of Azerbaijan “On the budget of the State Social Protection Fund of the Republic of Azerbaijan in 2012”.

The Chamber of Accounts carried out 46 audits, 7 expert analytic activities in comparison with 31 audits and 10 expert analytic activities in 2009 and  41 audits and 6 expert analytic activities in 2010. During the last years the Chamber of Accounts gave more preference to post financial budget control in conducting control activities, as during the reporting years the Chamber carried out 12 audits more than in 2009 and 6 audits more than in 2010.

These audits were conducted with the purpose of checking timely and efficient use of resources allocated from the state budget in terms of their scope, structure and assignment, financial transactions involving these resources in accordance with the rules and periods determined by the legislation, followance to the tax legislation, proper calculation of taxes, state duties, penalties and other receivables, as well as timely and full payment.

Alongside with the revealed faults and gaps the report notes such progress as drafting and duly presenting the orders as sections, sub-sections, paragraphs and expense paragraphs, articles and sub-articles of unique budget classification by following the requirements of financial resources from the organizations financed by the local expenses in the audits conducted on the expenses of the state budget, attaching assertion documents to the expenditure operations conducted in accounting, reflection of operations in accounting documents, attaching the relevant assertion documents on different assignment cleared from cash to expense, drafting monthly reports on expenses and presenting it to the accounting, reports on the execution of estimate of expenditures, reports on the move of main resources and materials, drafting and approving overall quarterly and annual balance reports due to the list of debtors and creditors and presenting them to the relevant bodies, timely conducting in several cases the activities on state programmes in education sphere, carrying out the provision of educational laboratory equipments to the secondary schools in compliance with the approved distribution, establishment of electronic data base on giving children from state schools to the families, approving in duly order the expenditure of estimates  on educational institutions and conducting operations in the level of expenditures of estimates, approving forecasting indicators and tariffication lists on classes and contingent, payment of salaries to the employees on the tables presented to the accounting in compliance with the staff schedule and tariffication schedule, to receive the cash monetary funds to the cash, ensuring the government policy in implementing and developing the housing economy to wholly respond to the requirements of housing services of the people by the organizations in housing sphere, maintenance fund for the improvement of housing and communal facilities, improvement, protection measures in the area, apartment buildings, residential and non-residential areas of engineering and technical devices to fund the maintenance and current repair and maintenance of the sanitary situation in the normal level, certification of housing and communal facilities, inventory, sanitations well as the elderly, the disabled and other persons with special needs social protection and social-welfare services in the direction of the positive things, such as the implementation of appropriate measures, as well as a number of shortcomings and deficiencies also were done. Also the following cases were revealed as indicators of local expenditures financed from the budget forecast prepared by the budget of expenses in some cases, failure to comply with the requirements of the relevant normative documents, the network of financing, staffing and execution of the full contingent of parameters taken into account, the budget of expenditure of funds on a number of transactions at the expense of changing the designation of , the tariff rates as a result of determining the correct payment of wages, on budget and off-budget funds given to forecast demand accurately determining on some expenditure items, pedagogical and technical-service personnel already on staff units maintenance in addition to norm, forecasting, and they no longer teaching hours in excess of the salary , school officials tariffication wasted as a result of the calculation of wages, to organize events during the preparation of relevant programs, the expenditure of funds for their events to the initial registration of documents and relevant reports, documents confirming the distribution of gifts in the course of events, the travel expense , as well as inviting foreign travel expenses provided for the payment of the case, this expenditure of budgetary funds, to determine the correct distance for the fuel consumption of fuel as a result of retirements, clarification directly to expenses while purchasing the inventories with the value of more than one hundred manats and with life cycle more than a year, allotment of funds from capital repair of privatized apartments, hired a temporary employee benefits, non-payment of civil servant, failure to comply with the requirements of the organization and procedure of the request for quotation, procurement procedures for expenditure of funds held, determining the prices of goods that are likely, without the consent of the relevant executive body of the balance of the fixed assets of the balance between free enterprise, a in some cases, a fully integrated preparation for repairs, maintenance and construction works have not been drawn up for the basic budget documents, forms № 2 in the preparation of contract prices, the direct effect on the price of the contract price in the table of indicators which have not been fully marked, cash book in some cases, adjustments in some cases, the funds received from the disposal of sporting goods, sportsmen pay the travel expenses, payments of calculations keeping with the long-term debt of the debtor and as a result, grant or refusal of the goods at the warehouse and accounting, cost estimates for the case not considered in various insurance companies for the purpose of the state property insurance contract signed with payment of funds, payment of long-distance personal telephone calls at the expense of budgetary funds, housing fund revenues less than the amount of calculation and prediction of losses on the stock, housing and service fees, transportation and disposal of household waste on the income, residential buildings (houses) within the non-residential areas by the housing fund in order to keep users and owners of the collection of funds for the less calculation, forecasting revenues for mandatory state social insurance contributions during the current capacity is not fully taken into account, as well as registration and recording of insurers and insured, making statements in some cases the process of full compliance with the requirements of legislation, application and calculation of fines and shortcomings of financial sanctions, a special permit (license) for the preparation of documents and payment of funds to the objects with the purpose to fro gasification, the investor in accordance with the value of project-estimate documents of the state capital without submission of the budget forecasts for investment, a facility that is expected to price (contract price) non-compliance with the requirements of the legislation without being held in procurement, construction works, non calculation of the value of the contract compared to the increase in prices of basic-rate estimate of the cost estimates and non calculation of the value of investor-estimate of expenditures of the construction, determination of the value of the contract of the object without defining drafting evaluation schedule of the work volumes, to determine annually the increase rate in some cases of the works conducted during the use of investment with state funds in comparison with the basis estimate of expenditures rate on some objects and implement in the calculation of the contract value of  other objects.

During the audits conducted by the Chamber of Accounts the following faults and gaps were revealed as  expansion of the application of information technologies in the field of general and specific criteria for the registration of taxpayers, making tax returns, processing, inform the tax payers, tax payers and found discrepancies in declarations differentiation etc. automation of procedures, such as achievement, improvement of tax administration as a result of the work done in the direction of the tax payers, especially private property as a reduction of the volume of debts to the state budget, the tax payers, as well as positive things, a number of types of payments deficit on the implementation of forecast parameters, the results of tax inspections calculated on the basis of the amount and application of financial sanctions, to fulfill the state budget in full, the court sentences provided on the basis of tax debts (the principal amount of the tax), as well as interest-bearing debt to the amount of the debt, the taxpayers own sheets will be provided by the tax authorities amounts the retirement of debt, not reviewing the causes of harm, the same taxpayer in a row according to the results of the on-site inspections of the tax on the turnover of the acts of the taxpayer discrepancies between the information on the existence of a number of tax base for VAT payers that may influence some of the reasons of discrepancies and their formation, then the turnovers based on the declarations presented after time-keeping of tax payers, time-keeping determined by the results of the turnover, in many cases, the low turnover after time-keeping declared in earlier period, failure of full implementation of decisions on property seizure , not following the tax legislation to comply with the requirements of the full amount of sale incomes of sales and calculating repair costs of material valuables and not proper keeping of records of various transactions, reducing the income tax statements of revenues, expenses deducted from income for taxation purposes, to increase the amount of damage by showing more the expenses deducted from the revenues in accordance with the Tax Code.

Large sums of money from the account of the measures taken by the Chamber in the reporting year has been possible to restore to the state budget, including funds already paid in cash to the accounts of the relevant institutions have been restored or paid to transfer to the state budget, quality of work performed and services in exchange for the increased cost of, or artificially implementation of additional works and services were provided, and it provided for the project-estimate documents, repair and restoration and reconstruction works has facilitated the implementation of the full amount. In addition, insufficient, or not carry out their contractual obligations and equipment inventory, budget organizations will be at the expense of the persons guilty of drug delivery, as well as outside of the prior registration of fixed assets and of goods, works and services, registration of goods, works and services disbursements made without the prior purchase of the debtor of the debt created by the withdrawal or cancellation of registration, as well as a lot of debt, the creditor has been provided in accordance with the cancellation or closure, in other words, financial resources into circulation excluding doubtful debts, as the main source of budget funds by the contractor use was prevented, in exchange for money paid to the relevant agencies of the goods (works and services) supply was completed. At the same time, the court was provided on the basis of things and mistakenly deleted a large amount of tax debts accrued interest of taxpayers, personal debt, such as debt recovery sheets will be provided by the tax authorities, the registration of tax debts, the amount of funding in the budget without the need for real decreasing resources and inefficient use of re- prevention, as well as the expense of the State Social Protection Fund of funds will be restored to the budget of the Fund to attract additional funds were provided.

Furthermore, the control of the Chamber as a result of the reporting year, hundreds of staff units, group or class has been cancelled; a lot of money as a result of control measures in other words, contrary to the requirements of legislation as it was possible to predict costs of allocation.

In addition, large amounts of debts to the state budget on the taxpayer to the tax payers 2 of the Ministry of Taxes and tax crimes, the criminal case launched by the Department of Primary Stu as well as the Chamber of Accounts of the Republic of Azerbaijan with the Memorandum of Agreement on mutual cooperation between the General Prosecutor's Office in the implementation of tasks arising from the joint of the General Prosecutor's Office two checks were carried out in the field of defense.

Summarizing above should be noted that, at the expense of all these measures to prevent a lot of useless expenditure, or the use of public funds in accordance with the requirements of legislation to take account of the manner it was possible to ensure that their accounting year, keeping the total amount spent by the Chamber, as in previous years, the budget There are a lot of times in comparison with the funds.

The Chamber as a result of the audit revealed shortcomings and deficiencies in the reporting year for responsible persons who have committed serious disciplinary actions taken by the relevant authorities has been achieved. Thus, 25 people (2 heads of office or organization, 2 heads of division, 4 chief accountants, 7 employees) were dismissed, 7 people (2 heads of department, 2 chief accountants and 3 employees) were given severe reprimand, 43 people (4 heads of office or organization, 4 heads of management or the deputy heads, 5 heads of department, 6 heads of  sector director, 16 chief accountants, and 8 employees) were given  reprimand, 46 people (9 heads of office or the organization, 3 deputy heads of management and the organization, 13 heads of department, 2 deputy directors, 4, heads of sector, 6 chief accountants and 9 employees), were get warning, and 1 person (head of the sector) was moved to the lower position.

The report of the Chamber, along with financial and budgetary control measures, in the direction of the current regulation is provided with detailed information about the work done, including:

• The reporting year was very significant year in the activity of the Chamber and the Chamber of Accounts has had 10 years anniversary of establishment. With the Order of the President of the Republic of Azerbaijan Honourable Mr. Ilham Aliyev, for his contribution to the activities of the Chamber and the Chamber of Accounts, the Chairman of the Chamber was granted with the second degree "for the service to the government" order, 6 member of the Chamber were granted with "Progress" medal, the 10 employee of the Chamber were granted with "for Distinguished Civil Service Medal". The Chamber of Accounts of Azerbaijan Republic on the occasion of the anniversary has held solemn meeting on 2 November with the representatives of the National Assembly, a number of central executive power bodies, international organizations and foreign states, and heads of Supreme Audit Institutions, as well as on the occasion of the anniversary of the Chamber received congratulation letters from the heads of the Presidents and Secretary Generals of INTOSAI and EUROSAI and heads of the SAIs of Germany, France, Austria, Spain, South Africa, Sweden, Saudi Arabia and the leaders of the Latvia.

• Under the current activities of the Chamber in the reporting year to achieve the objectives of its strategic targets and, in particular, with the support of the World Bank carried out in order to strengthen the capacity of the Chamber, "Corporate and Public Sector Accountability" (CAPSAP) Project under the Agreement signed by the individual on the individual consultant by consultant carried out by the Chamber of Accounts. The current legal framework for the reform of the Chamber's initiatives and to assess compliance with international best practices, relevant reports prepared by private consultant presented to the Chamber, these reports have been discussed by the special commission of the Chamber. In addition, at the same time, the Chamber of accountability in the public sector capacity building and development of cooperation with the European Union in the direction of improvement measures were implemented. Thus, in the field of financial management reforms in the European Union on the execution of the initial budget for the years 2012-2016 Support Programme in the implementation of accepted the Chamber as one of the main partners. Action Programme in the Republic of Azerbaijan within the framework of the European Neighbourhood and Partnership Instrument Support Program for Reform of State Financial Policy in the direction of the work done in the realization of the project, the European Union experts, who visited the Republic of Azerbaijan within the framework of this project with the Chamber of Accounts of the events planned schedule for part of the initial agreement between the parties was obtained;

• "On normative legal acts of Azerbaijan Republic" dated December 21, 2010 Constitutional Law No. 21-IVKQ coming into force on 17 February 2011, and additions and amendments to some legislative acts of the Azerbaijan Republic in connection with the Chamber of Accounts of the relevant normative-methodical documents in order to improve the Chamber of Accounts of the Board dated 20 June 2011 in relation to the Chamber by the decision of Q-37 of the additions and changes to the regulatory and methodical documents, as well as "the Chamber of Accounts of Azerbaijan Republic, normative-methodical documents and clearance of the" Rules of the Constitutional Law in accordance with the requirements of re-developed. At the same time last year, "the organization and carrying out a measure of control over the spending of state budget funds" and "administrative-territorial units (city, district, settlement), a measure of control over the organization and implementation of housing and communal economy" model for the project was methodical recommendations prepared by the Chamber as well as other activities appropriate to draw up recommendations on the areas had begun;

•  civil servants in order to encourage resolution of issues arising out of actions related to the Law of the Republic of Azerbaijan “On the civil service”, President of the Republic of Azerbaijan dated 3 September 2001, approved by Decree No. 569 "Rules of professional ranks to civil servants in state bodies" of the 2003 - Decree No. 911 of August 4, approved by the “Classification Code of administrative and auxiliary positions" on making amendments and additions made to the 2008 Decree 810, dated August 6, in accordance with the Order of the Chairman of the Chamber of Accounts the 7 employees of the Chamber were granted  with relevant professional degrees;

•  in connection with appeals of the citizens it should be noted that these appeals by the Chamber of Accounts of the Republic of Azerbaijan during the year of 2011 "on the rules for consideration of the appeals of the citizens," the Law of the Republic of Azerbaijan, President of the Republic of Azerbaijan, dated December 29, 1998, approved by Decree No. 52 " public authorities, institutions, organizations and institutions to citizens, applications and complaints of clerical work on the "Rules and to the Chamber of Accounts, dated August 03, 2007 19/151, approved by the decision of the meeting of" citizens of the Republic of Azerbaijan Chamber of Accounts, statements and Rules on complaints of clerical work and the Chamber of citizens "in a timely manner in accordance with the considered and investigated in accordance with, the applicants informed, in special cases the applicants were accepted by the responsible officials of the Chamber;

• The Chamber of Accounts by the "National Strategy on Increasing Transparency and Combating Corruption on approval of the" President of the Republic of Azerbaijan dated July 28, 2292, 2007, on the work done in the execution of the instruction in the Chamber on 29 December 2011 No. 1/11-846 The letter was presented to the annual report to the Prime Minister of the Republic of Azerbaijan;

•  Last year the Chamber of Accounts of the Republic of Azerbaijan entered the Azerbaijan Republic Commission on Combating Corruption of the Organization for Economic Development and Cooperation (OECD) Anti-Corruption Network for Eastern Europe and Central Asia within the framework of the Istanbul Action Plan of the Republic of Azerbaijan in the second round evaluation report on the adoption and to fight against corruption opinion on the issue of the relevant recommendations have been provided by the Chamber.