Challenges before Bulgarian state universities for development of financial management and control systems in spending public funds

After accession of Bulgaria to the European Union, the Bulgarian government performed new initiatives and some actions related to the implementation of major reforms in the field of financial control, in order to ensure good financial management of public funds. Among several new acts, the Financial Management and Control in the Public Sector Act was focused on managerial accountability and requires the managers of public sector organisations to manage resources so as to achieve the objectives of the organisation, and to ensure the protection of public interests. They have an obligation to introduce adequate and effective financial management and control systems and to ensure the internal audit function. “Prof. D-r Assen Zlatarov” University is the only state university in Southeastern Bulgaria. The University faced the challenge of designing and implements a system for financial management and control after legislative amendments that were passed to implement the adopted strategy for the overall development of public internal financial control in Bulgaria after 2006. Difficulties have risen from the differentiation of the various components of the integrated framework for financial management and control, as well as misunderstanding how important the implementation of these systems is. The internal rules adopted by that time have launched a dynamic process of development of the internal controls in this public institution. In 2012, the financial management and control system of the University was updated in accordance with five interrelated components, based on the Integrated Internal Control Framework, as well as with the organisational structure and its specific activities, contributing to the consistent application of the regulatory framework in the country. The financial management and control is carried out through financial management and control systems, including policies, procedures and internal rules established by the management of the organisations for the purposes of providing reasonable assurance that the goals of the organisation have been achieved through: 1. Compliance with legislation and internal acts and contracts; 2. Reliability, comprehensiveness and accuracy of financial and operational information; 3. Economy, efficiency, effectiveness and transparency of operations; 4. The safeguarding of assets and information; 5. Promoting compliance with prescribed management policies. One of the biggest challenges facing Bulgarian higher education institutions in the implementation of the financial management and control is the process of risk management, which should provide a better understanding of potential threats, actions or events that may positively or negatively affect the ability of public institutions to achieve their objectives.