19.05.2010

The last quarterly meeting of the Stakeholder Committee for Crown Agents\' Programme for the Modernisation of the Bulgarian Financial Administration was held in Sofia on Wednesday, 19^th of May 2010. This committee has been an important forum for discussion, by the key stakeholders, of programme implementation and related needs, requirements and recommendations. At the final committee meeting, Programme Manager, David Smith, confirmed that Crown Agents is now preparing a master schedule of more than 350 recommendations, made under the programme, for submission to the Minister of Finance. 

\"Of course, we have submitted reports and recommendations continuously as the programme has progressed, but this master schedule will be a compilation of all major issues and recommendations and symbolises our efforts to ensure sustainability and continuity of the results achieved,\" Crown Agents\' Team Leader, John Brown said.

Programme Manager, David Smith, who chaired the meeting, said he believes Bulgaria would continue to benefit from the results of Crown Agents\' work even beyond the duration of the current contract. \"Approximately two thirds of the recommendations submitted are at various stages of implementation by the corresponding agencies and their full effect is not felt yet. But all of them are aimed at enhancement of revenue collection which is especially important in the current economic situation\", he said. 

\"We highly appreciate the work that has been carried out within the framework of this contract and the recommendations that Crown Agents have made across the agencies and the Ministry of Finance\", said Rumen Porozhanov, Head of the Cabinet of the Minister of Finance.

The Programme for Modernisation of Bulgarian Financial Administration began in June 2007, following a six-month gap after the end of the previous Customs project. The current Programme is significantly smaller in value but its scope of activities was substantially widened to include all aspects of state revenue enhancement. Crown Agents\' advisors supported a wider range of agencies that are responsible, directly or indirectly, for protecting revenue and preventing frauds. These included the National Revenue Agency (NRA), the National Customs Agency(NCA), other Single Level Spending Units under the responsibility of the Ministry of Finance and the State Agency for National Security (SANS).

At the request of the Minister of Finance at the time, Crown Agents\' role became much less operational and more strategic, focused on developing the operational capacity of the agencies through the provision of advices and training. It is therefore not appropriate to simply relate the activities under the Programme with overall levels of revenue collection during the period as a large number of the benefits will only materialise following the adoption and effective implementation of the recommendations made.

Crown Agents made a large number of analyses and assessments of legislation and working practices. The advisors\' reports covered the VAT Registration System, VAT Fraud Detection, Development of the NRA Risk Management Approach, Enhancement of information exchange, NCA Modernisation, Mobile Assurance Team  (MAT) Training and Development, Excise Control and Use of IT Systems to Prevent Corruption and Crime.

These analyses resulted in a significant number of recommendations for improvement and specialised trainings, based on the needs identified. Crown Agents then organised a series of training events, which were aimed at enhancing the capacity of state administration to protect revenue and combat frauds. Training was delivered to over 700 staff in the revenue agencies and other enforcement bodies, including SANS and the Ministry of Interior. Among the major areas covered were improving the use of risk analysis in identifying and targeting revenue threats, systems based audit in Customs post clearance control, rummage techniques and money laundering awareness.

Crown Agents has also been instrumental in the creation and development of:

• A Fiscal Crime Coordination Group, aimed to encourage inter-agency cooperation in the sharing of knowledge and experience in relation to serious fiscal crime.
• A VAT Registration Unit to verify the intentions of companies applying for VAT registration and reduce the risk of phantom companies fraudulently reclaiming VAT
• An Information Technology (IT) Security Policy for the Ministry of Finance, which will reduce the risk of fraud and corruption.

Although Crown Agents\' role under the current Programme was mainly strategic the advisors also supported the practical aspects of revenue collection through assistance in a number of operational exercises of the NRA and the NCA. Amongst these exercises are the NRA Winter and Summer Compliance Campaign in the major resorts, which proved to be crucial in increasing the levels of income declared by companies and consequently their tax liabilities. Crown Agents also supported various operations of the Customs MATs at the borders and exercises targeting specific high value excise goods such as oils, tobacco and alcohol. As well as supporting the campaigns themselves, the advisors also reviewed their implementation on each occasion and provided specific recommendations for enhanced effectiveness in the future.