Problems of the financial and budgetary system of Tabriz metropolis and solutions to these problems
The first problem of the municipal financial system is to use the modified cash basis:
As long as the municipality uses the adjusted cash basis. Financial transparency will not be achieved. Because on this basis, revenues are recognized at the time of receipt and expenses at the time of realization. and realized but not received incomes are identified
It can’t be done. that this basis will become a tool for financial abuse and lack of transparency. And it is a method that is not valid in any of the accounting standards, regulations, and guidelines, and it is rejected and has no validity as a method. Because it is not able to reflect the facts and is not responsive to the needs and issues of any organization, and it is surprising that despite the clear declaration that this method is rejected, no action has been taken by the honorable city council and municipal officials. Of course, until there is a sense of transparency and the entry of financial specialists in the city council, the use of the obsolete basis of cash will continue.
And the way to get out of the adjusted cash basis and prevent large-scale abuses is to change the adjusted cash basis to the accrual basis.
The second problem: using the traditional budgeting method and not disseminating the budget with full details to the main stakeholders (citizens).
Due to the fact that the financial system method means the modified cash method is an obsolete method. The method used in the budget is also completely outdated and rejected. Because the regulatory budget based on tradition has no logical and reasonable basis. Considering that Tabriz metropolis is divided into 10 municipal districts. For example, on what basis is the budget of region A seven times the budget of region B? Or the failure to release the budget with full details has caused rent and created a huge gap between social classes. Whereas, if the performance of the municipality is published in the form of income and expenses. We will see the main source of the municipality’s income is the granting of rental permits (sales concentration), changing the use of agriculture to commercial and so on. forms that this overnight enrichment of people is the result of these rent permits. The social effects of commercial density in the form of air pollution, heavy traffic, and the loss of the beauty of the city. It is quite evident.
The way out of the budgeting problem;
continues
All problems and solutions will be published in the form of video files.
Let’s be aware and choose consciously.
Financial performance of the municipality
Municipal budget
rent seeking
Dr. Seyed Hafez Amirazad
This post is written by DrAmirazad