Development finance assessment

Internal and external scrutiny
The latest PEFA assessment (2018) reveals that Uzbekistan is still in the process of 
establishing a fully functional internal audit system. The internal audit function was recently 
established for central government entities, representing 81 percent of total budgeted 
expenditure and 84 percent of revenue. The current system of financial inspection does not 
follow international standards and there is little, or no internal audit focused on monitoring 
of the internal control systems. It is expected that by 2025 internal audit and financial control 
mechanisms will be operational across all ministries and departments.
The audit reports are submitted to both chambers of the Parliament for discussion and 
approval. However, the PEFA (2018) notes that the Parliament cannot analyze compliance 
with priorities agreed in the national development strategy nor the links between the budget 
and the strategic plans developed by the ministries. Sector committees scrutinize budget 
submissions and make recommendations to the plenary for consideration and approval, 
although Parliament has no power to amend budget estimates. There is, however, not 
obvious public participation at hearings.
The external audit and scrutiny by the legislature is relatively sufficient to hold the 
government accountable for its fiscal and expenditure policies, and their implementation. It 
is carried out annually by the Chamber of Accounts, which is the Supreme Audit Institution, 
created in 2002. The Chamber of Accounts report is a review on the budget execution 
applying national standards, without focus on material issues and control risks. The Chamber 
of Accounts is independent from the executive and accountable to the President. 
The external audit report represents a specific output produced by the Chamber of 
Accounts with conclusions on the execution of the State Budget. The legislative scrutiny of 
the audit report follows the established practice by the Law on Parliamentary Control. The 
transparency is not sufficiently ensured by having only mass media coverage of hearings 
of the audit report in the legislative chamber of the Parliament. There are no records of 
public attendance at hearings and the publication of the approved audit report is not easily 
accessible to the public. 
The Parliament’s oversight of the budget process is gradually improving. From the next 
budgetary cycle (2020-2021) onwards the Parliament should, when discussing the Draft 
Budget, take into consideration the mid-term planning documents and long-term perspective 
when assessing the annual budget proposal. While political control has been introduced 
across the entire budget-preparation and execution processes, there is still relatively little 
political participation in linking the strategic planning targets with the available resources 
needed for their realization.