Volume 12 - Issue 64
/ April 2023
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DOI: https://doi.org/10.34069/AI/2023.64.04.26
How to Cite:
Zaikina, H., Saranov, S., Demenko, O., Oksin, V., & Bilyk, V. (2023). Legal nature of the tasks and functions of the financial
control of railway transport of Ukraine. Amazonia Investiga, 12(64), 263-268. https://doi.org/10.34069/AI/2023.64.04.26
Legal nature of the tasks and functions of the financial control of
railway transport of Ukraine
Правова природа завдань та функцій фінансового контролю залізничного
транспорту України
Received: April 10, 2023 Accepted: May 29, 2023
Written by:
Zaikina Hanna1
https://orcid.org/0009-0007-7141-1391
Saranov Serhiy2
https://orcid.org/0000-0001-9707-7730
Demenko Oleksandr3
https://orcid.org/0009-0005-4992-9907
Oksin Vitaliy4
https://orcid.org/0000-0001-6080-7752
Bilyk Vadym5
https://orcid.org/0000-0002-6511-1719
Abstract
The purpose of the article is to reveal the legal
nature of tasks and functions of financial control
of railway transport of Ukraine. Research results.
The essence of state financial control has been
studied. The peculiarities of financial control on
the whole and in railway transport in particular
are determined. The concepts of "financial
control", "tasks of financial control", "functions
of financial control" are clarified. Practical
meaning. The main tasks and functions of state
financial control in general and in rail transport
specifically are established. Value/originality. It
was determined that the functions of the state
financial control of railway transport of Ukraine
should be understood as a certain system of tasks
and responsibilities assigned to authorized state
bodies and services in order to ensure efficient
and economical use of railway transport funds.
Keywords: financial control, functions, railway
transport, State, tasks.
1
Candidate of Legal Sciences, Doctoral Student of the Scientific Institute of Public Law, Ukraine.
2
Candidate of Law Sciences, Senior Researcher at the Scientific Institute of Public Law, Ukraine.
3
Candidate of Legal Sciences, Senior Researcher of the Scientific Institute of Public Law, Ukraine.
4
Doctor of Legal Sciences, Leading Researcher of the Scientific Institute of Public Law, Ukraine.
5
Candidate of Legal Sciences, Associate Professor, Associate Professor of the Police Law Department of the National Academy of
Internal Affairs, Ukraine.
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Introduction
Financial control is a mandatory attribute of the
economy of any country, as it is aimed at
compliance with the law, financial discipline,
prevention of financial offenses during the
mobilization, allocation and use of funds, costs
for the implementation of tasks and functions of
the State and effective socio-economic
development of all financial relations actors.
Recently, a significant increase in the number of
economic crimes has been observed in Ukraine;
there is a rapid process of criminalization of
banking and credit systems, foreign economic
activity. Accordingly, it is necessary to
strengthen the fight against crimes in the
economic sphere; its effectiveness will depend
on the legal framework, existence and validity of
financial control methodologies and
terminology. Taking into account these aspects,
at the present stage of organization of effective
financial control over the completeness of the
formation and timeliness of revenues to the
budgets of all levels, as well as over the legality
and efficiency of the use of funds and property
becomes one of the directions of modern
economic and financial policy (Honcharuk et al.,
2019).
However, in terms of the functioning of railway
transport in Ukraine, the symbiosis of
administrative and financial law is important,
which complicates this topic and necessitates
scientific research.
The purpose of the article is to reveal the legal
nature of the tasks and functions of the financial
control of railway transport of Ukraine based on
the theoretical foundations of financial and
administrative law, the norms of current
legislation and the practice of the executive
authorities.
Methodology
The methodological basis of the research is a set
of general and special scientific methods and
methods of scientific knowledge, the application
of which made it possible to form a holistic and
comprehensive idea of the legal regulation of
financial control over the rail transport in
Ukraine.
With the help of logical and semantic, deductive
method, as well as methods of abstraction and
generalization, the conceptual apparatus was
deepened; the concepts of "financial control",
"tasks of financial control", "functions of
financial control" were clarified.
Formal and logical method was used to
determine the features of financial control in
general and over railway transport in particular.
Using the method of abstraction and
generalization, the author's concept of the
functions of state financial control of railway
transport of Ukraine was formulated.
Structural and functional method was the basis
for determining the essence of State financial
control in the system of financial and legal
relations.
Induction, deduction, and synthesis were applied
when determining the main tasks and functions
of public financial control.
The method of system analysis was used to
identify the tasks of state financial control over
railway transport.
Stuctural method was helpful when identifying
the list of functions of state financial control
(analytical, informative, preventive, corrective,
mobilizing and law enforcement).
Hermeneutic method made it possible to
investigate the views of scholars on the problem
under consideration, as well as legal instruments
governing this institution.
Literature Review
Prasiuk (2020) stresses that financial control is a
universal category regulated by both public and
private law, this is confirmed by its main
functions: maintaining financial discipline,
preventing financial offenses, applying coercive
measures for their commission. The essence of
financial control is control over the financial and
economic activities of the object of control,
which accumulates and spends funds for public
purposes or uses public property or other
financial resources.
In addition, the author notes that the essence of
state financial control is also revealed through its
tasks, which, in general, include: ensuring
compliance with the requirements of financial
legislation and financial discipline; detection,
elimination and prevention of financial offenses,
as well as provision of prerequisites for holding
perpetrators liable; ensuring the fulfillment of
financial obligations by all subjects of financial
legal relations; checking the timeliness,
Zaikina, H., Saranov, S., Demenko, O., Oksin, V., Bilyk, V. / Volume 12 - Issue 64: 263-268 / April, 2023
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efficiency, rationality of public financial
resources using.
Savchenko (2008) claims that the main tasks of
state financial control are checking the timeliness
and completeness of the formation of state funds;
assessment of the legality and effectiveness of
their distribution and usage, as well as
assessment of the expediency and justification of
decisions taken by relevant state bodies and
certain persons and related to financial issues,
management of state property, with the aim of
preventing possible inappropriate and inefficient
spending of costs, property, etc., detection of
financial discipline violations and application to
offenders of the measures of influence, provided
for by the current legislation. That is, state
financial control covers all operations related to
the movement of state financial resources.
According to Hupalovska (2012), the goal of
state financial control is reflected in more detail
in the tasks aimed at its achievement. There are
two main approaches to defining control tasks.
According to the first one, the task of control is
to identify the actual state of affairs, compare it
with the intended goals, assess the situation and,
if necessary, propose corrective measures.
Pursuant to the second one, it is the
controllability of the state and attitude of the
objects of control towards the established norm.
The tasks of state financial control are to secure
legality, efficiency, financial discipline and
rationality during the formation, distribution,
possession, use and alienation of assets
belonging to the state.
In the opinion of Pikhotskyi (2015), the basic
tasks of state financial control are:
− to promote the implementation of the state
financial policy;
− to ensure timely and complete fulfillment of
financial obligations;
− to facilitate balance between income sources
and directions of use of funds in accordance
with the financial plans of economic entities;
− identify internal reserves for the growth of
centralized financial resources;
− encourage rational use of available financial
resources;
− ensure proper accounting and reporting;
− comply with current legislation and other
regulatory acts.
Maksimova (2012) notes that financial control
performs the following functions: 1) cognitive –
identifies factors that negatively affect the
development of productive forces and industrial
relations with the aim of regulating them;
2) practical –provides management of the
economy using specific methods in relation to the
rational usage of material, labor and financial
resources. In our opinion, the definition of the
cognitive function should be supplemented, since
it lies in identifying not only negative, but also
positive factors, the analysis of which can help
raise the level of the domestic economy.
Results and Discussion
The main task of the state control system is to
increase the effective activity of state authorities
in protecting the interests of the country and its
citizens by increasing the responsibility of these
bodies and their officials for the performance of
their duties. Such control, by its very nature,
should be carried out on behalf of the State by
special monitoring bodies not bound by any other
functions (Pikhotskyi, 2015).
Slobodianyk (2014) claims that state financial
control is one of the most important functions of
state administration, which lies in promoting the
implementation of the state’s financial policy,
ensuring the process of formation and effective
use of the country's financial resources to achieve
its goals in the field of distributional relations.
Domestic scientists consider the tasks of state
financial control at the macro- and micro levels.
Thus, the authors identify the tasks of state
financial control at the macro level:
1) exposure of activities aimed at concealing
taxes and mandatory payments;
2) prevention of activities that monopolize
markets;
3) blocking activities aimed at organizing
production of goods and provision of
services prohibited by the state;
4) termination of activities containing
significant social threats;
5) prevention of activities violating the
property rights of business entities,
legitimate interests of the state and society in
general, etc.
The tasks at the micro level include:
1) compliance with the rules of accounting and
financial reporting;
2) ensuring payment discipline, uniform
pricing standards and setting tariffs;
3) prevention of inappropriate and inefficient
use of budget and other state funds;
4) compliance with state and communal
procurement procedures;
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discouraging of improper and non-targeted
application of state and communal property;
preventing misuse of credits and loans
received under Government guarantees, etc.
(Rusin & Shuliuk, 2018).
Other scientists note that the essence of financial
control is revealed in the main tasks, which are:
− checking the timeliness and completeness of
financial obligations to the state and local
self-government bodies by controlled
subjects;
− verification of the performance by state
authorities and local self-government of the
functions entrusted to them in the formation,
distribution and use of monetary funds;
− verification of compliance with the
correctness of financial transactions,
preservation of funds and material
resources;
− detection and elimination of violations of
financial discipline;
− prevention of violations of legality in the
field of financial activity, provision of
compensation for material damage,
identification and prosecution of
perpetrators;
− identifying internal production reserves;
− improving efficiency;
− cost-effective use of material and monetary
resources.
Implementation of the listed tasks of financial
control is a necessary condition for ensuring law
and order and legality in the process of carrying
out financial activities. One of the aspects of
legal order in the field of finance is financial
discipline (Honcharuk et al. 2019).
Having analyzed the views of scientists
regarding the definition of the tasks of state
financial control, it should be said that the Law
of Ukraine "On the Basic Principles of State
Financial Control in Ukraine" is in force in
Ukraine, according to which the implementation
of state financial control is ensured by the central
body of executive power, authorized by the
Cabinet of Ministers of Ukraine to implement
state policy in the field of state financial control.
The legislator defines the main tasks of the state
financial control body, which are:
implementation of state financial control over the
use and preservation of state financial resources,
non-current and other assets, correct
determination of budgetary requirements,
identifying budgetary requirements and
commitments, effective use of funds and
property, status and reliability of accounting and
financial reporting in ministries and other
executive bodies, state funds, mandatory state
social insurance funds, budgetary institutions and
business entities of the state sector of the
economy, including business entities, in the
authorized capital of which 50% or more of the
shares belong to economic entities of the state
sector of the economy, as well as to enterprises,
institutions and organizations that receive
(received during the period under review) funds
from budgets of all levels, state funds and
mandatory state social insurance funds or use
(used during the audited period) state or
communal property, in compliance with budget
legislation, procurement legislation, activities of
economic entities, regardless of the form of
ownership, which are not defined by legislation
as controlled institutions pursuant to a judicial
decision in criminal proceedings (Law of
Ukraine 2939-XII, 1993) .
That is, in a general sense, the tasks of state
financial control over railway transport of
Ukraine should be understood as the activity of
authorized state bodies, the purpose of which is
to ensure the effective use of state budget funds
and other financial resources of the state. Such
tasks include:
1) control over the implementation of the
budget and other state financial programs by
the national railway carrier;
2) verification of financial statements of state
organizations and enterprises in the field of
railway transport;
3) monitoring of public procurements and
control over their execution;
4) detection of violations in the sphere of use of
state funds of railway transport;
5) development of recommendations for
improving the management of state finances
in the railway transport industry of Ukraine.
As for the functions of state financial control,
some authors note that they are a manifestation
of the essence of such control in practice. In their
opinion, state financial control performs the
following main functions: analytical,
informative, preventive, corrective, mobilizing
and law enforcement.
Analytical function of state financial control
includes a range of actions for analysis, study of
the implementation of current legislation in terms
of the use of state budget funds; identification of
deviations in formation of revenues and
expenditures of a subject of financial activity;
abnormalities in the field of financial activity of
state institutions (ministries, departments, other
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bodies); analysis of the causes of variations
(investigation of the facts that caused them,
identification of perpetrators).
Informational function of the state financial
control is reduced to the fact that the data
obtained as a result of its implementation should
become the basis for making appropriate
management decisions and taking corrective
measures that will ensure the functioning of the
economic entity in accordance with the norms
established by the state.
Preventive function is a priority direction of
control and audit work, aimed at identifying
conditions contributing to the violation of norms
and standards established by laws and
regulations, incidents of mismanagement,
shortages, thefts and abuses, as well as the
identification of persons guilty of financial
violations, and bringing them to justice in
accordance with the law.
Corrective function ensures the development of
proposals to eliminate identified violations of the
financial and economic activity of enterprises
and organizations, other subjects of control.
Mobilizing function involves elimination of the
consequences of financial violations committed
by business entities, conditions that contributed
to them, and the development of organizational
and legal measures to spread progressive
management methods and prevent financial
violations at other objects of state regulation.
Law enforcement function is a means of ensuring
the legality of the actions by officials and
citizens; it is associated with bringing to liability,
as well as the application of state or public
influence measures to officials and citizens guilty
of shortcomings and violations (Rusin & Shuliuk
2018).
When determining the list of tasks of state
financial control, the legislator also defined the
functions assigned to the authorized body. Thus,
state financial control body:
1) carries out state financial monitoring and
control over: performing functions in the
management of State property; targeted and
effective use of state and local budget funds;
addressable use and timely repayment of
loans received under state (local)
guarantees; reliability of determination of
budgetary requirements when drawing up
planned budget indicators; compliance of
budget commitments made by the managers
of budget funds with the corresponding
budget allocations, the passport of the
budget program (in case of application of the
program-target method in the budget
process); accounting, as well as drawing up
financial and budget reporting, passports of
budget programs and reports on their
implementation, estimates and other
documents used in the budget
implementation process; the state of internal
control and internal audit of budget funds
managers; elimination of identified
deficiencies and violations;
2) develops proposals for eliminating
identified shortages and infringements and
preventing them in the future;
3) takes measures in accordance with the
established procedure to eliminate breach of
legislation revealed in the course of state
financial control and holds the perpetrators
liable;
4) exercises other powers determined by the
laws of Ukraine and assigned to it by the
Cabinet of Ministers of Ukraine (Law of
Ukraine 2939-XII, 1993).
Conclusion
Since railway transport is one of the most
important components of the transport
infrastructure of Ukraine and s a necessary
general condition for the production of any
product, which ensures connections between
industries, enterprises, regions of the country,
and foreign countries (Sirko et al. 2022, p. 198),
state financial control is necessary to ensure
efficient and economical using costs and stable
development of railway transport.
That is, the functions of state financial control of
railway transport of Ukraine should be
understood as a certain system of tasks and
responsibilities assigned to the authorized state
bodies and services in order to ensure efficient
and economical use of railway transport funds.
Most often, these functions may include
checking the activity of railway enterprises for
compliance with legislation and budget
restrictions, analyzing the effectiveness of public
funds use, monitoring compliance with budget
restrictions, providing recommendations for
improving financial management and ensuring
transparency and availability of information on
the usage of public funds in railway transport.
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