1. Developments And Achievements In Implementing Public Internal Financial Control (PIFC) Reform In Armenia
EDGAR MKRTCHYAN, PhD
Chairman of Executive Committee IACOP
Head of FMC Methodology Division-Deputy Head of PFM Methodology Department of the Ministry of Finance of RA
11-12 June 2018, Tsaghkadzor, Armenia

2. Public Internal Financial Control (PIFC) Reforms
Public Internal Financial Control Strategy
(Government Protocol Decree No 44, On 11 November 2010)
Revised Strategy of Public Financial Management System Reform
(Government Protocol Decree No 6, On 18 February 2016)

3. Public Internal Financial Control Strategy focuses on three activities
Institution of a Centralized Harmonization Unit (CHU), responsible for implementation of a public internal financial control system in compliance with international standards
Financial management and control based on managerial accountability
Internal audit

4. CHU Directorate Structure
Public Financial Management Methodology Department
(CHU Directorate)
CHU in the MoF
for FMC and IA
Financial Management and Control (FMC) Methodology Division
Internal Audit Regulation and Coordination Division
Procurement Process Regulation Division

5. Revised Strategy of PFM System Reform
Budget Cycle
Policy-based fiscal strategy and budgeting
Predictability and control
in budget execution
Accounting and reporting
External scrutiny and audit
Transparency of Public Finances
Management of Assets and Liabilities
Budget reliability
Public Internal Financial control (PIFC)

6. Revised Strategy for PFM System Reform Action Plan for 2016-2020
Introduction of FMC system
Elaborating methodology for introduction of the FMC system
Piloting of drafted FMC methodology in at least two public entities
Revision and specification FMC concept note and FMC law drafts according to the results of drafted and piloted methodology
The drafts of FMC concept note and FMC law accepted by Government of RA
2019
Adoption of the Law on FMC by the National Assembly of RA
Adoption of the action plan for FMC law enforcement
Practical introduction of FMC in public sector organizations of RA

7. Revised Strategy for PFM System Reform Action Plan for 2016-2020
Internal Audit
Professional skills of internal auditors
2016
Internal auditors capacity assessment and development of capacity development programme
Revision of internal auditors training programmes in line with international best practice
Capacity development of internal auditors
Internal audit methodology revision
Clarification of audit performance
2017
Emphasis on the management feedback on auditing disclosures and review process
2018
Emphasis on practical issues of internal auditing
Evaluation of salary calculation and payroll audit  
Provision of internal and external audit cooperation

8. 2016 Results Drafted FMC documents: FMC manual
Managerial accountability methodology
Risk management methodology
Internal Control Standards

9. Current activities FMC system piloting in at least two public entities
Results
Gap analysis on currently existing internal control system in the public sector of Armenia
Finalisation of the package of documents on FMC (manual, draft legal acts)
Development of a detailed action plan for the new FMC system piloting
Till the end of 2018
FMC system piloting in at least two public entities

10. Programme Budgeting (PB)
Legal Grounds for the Fully-fledged Introduction of PB
PB Methodology
Institutional Issues - Enhancement of Internal
Control Systems
Human Capacity Development
Automatization of PB Related Functions

11. PIFC vs Program Budgeting

12. Thank you for attention!