Budget Balances of the Union State Increased by Almost 40% and Reached RUB 2.8 Bln in 2017
The Board of the Accounts Chamber of the Russian Federation, chaired by Tatyana Golikova, reviewed the operational report on the execution progress of the Union State’s budget for January-December 2017, prepared by the Accounts Chamber in collaboration with the State Audit Committee of the Republic of Belarus.
The presentation was made by Irina Tretyakova, the Department Director.
Once again, the analysis of the management and execution of the Union State’s budget in 2017 revealed problems in the quality of the financial management and in the work of public customers under the Union State’s joint programs and activities.
In 2017, the revenue budget of the Union State was executed in the amount of RUB 6.8 bln (100.9% to the annual revenue amount, as provided by the adjusted consolidated budget detailed sheet). Cash expenditures execution amounted to RUB 4.1 bln (84.6%), what is the worst figure in the last four years. As on January 1st, 2018, the budget balance of the Union State amounted to RUB 2.8 bln, showing an increase of 38.1% against 2017.
As noted by the Board, such excess of actually received revenues of the Union’s budget over the planned indicators was mainly due to non-tax revenues for the total amount of RUB 58.1 bln. 98.5% of this amount were fines and penalties (under public contracts concluded by the Ministry of Industry and Trade of Russia and the Ministry of Agriculture of Russia in order to implement the Union’s programs “Development of Innovative Technology and Equipment for the Production of Competitive Composite Materials, Matrices, and Reinforcing Elements in 2012–2016” and “Innovative Development of the Production of Potatoes and Jerusalem Artichoke”), recovered as part of fulfilling of petitions submitted by the Accounts Chamber of the Russian Federation.
As in previous years, the Board drew attention to the insufficient income planning, in particular, the revenues of the Broadcasting Organization of the Union State from entrepreneurial and other income-generating activities. As of March 28, 2018, the regulatory document of the Union State, determining the procedure (the method) for planning non-tax budget revenues of the Union State in terms of their sources, was not accepted by the Standing Committee. Meanwhile, the planned indicators of revenue from the activities of the Broadcasting Organization of the Union State are steadily growing: whereas in 2017, such revenue was planned in the amount of RUB 1 bln, in 2018, it was as much as RUB 4.5 mln, or 4.5 times more.
The audit also showed that the Union’s budget expenditures were irregular: almost 40% was executed in Q4 2017, which creates risks of late implementation of of the Union State’s programs and activities.
The total amount of unallocated budget funds, as well as the budget allocations unclaimed by their managers and recipients, was RUB 749.3 mln, which is more than three times higher than in 2016. The main share in the amount of unused budget funds (91.3%) was the remnants according to Section “Other Expenses”, due to the late approval (in December 2017) of three new programs of the Union State.
The lowest level of demand for budget allocations falls on Section “The Environment and Natural Resources Protection, Hydrometeorology, Cartography, and Geodesy”, under which 26.1% of the relevant indicator of the adjusted consolidated budget detailed sheet was not financed. The above section accounts for the lowest value of the cash expenditures execution (73.9%). The reason for this was an extremely low level of expenditures execution, as established in the Republic of Belarus under the program “Development of the Hydrometeorological Safety System of the Union State in 2017–2021” (25.4%).
In general, only under five sections of the functional classification, the performance level exceeded 99%. The use of funds was fully implemented by 5 of the 24 main managers (recipients) of budget funds in the Union State (20.8%).
In 2017, cash expenditures for the implementation of nine programs were RUB 2.3 bln or 98.9% of the relevant indicator of the adjusted consolidated budget detailed sheet, what is the best figure for the last three years (in 2015: 98.4%; in 2016: 96.8%). At the same time, the actual amount of program expenditures and their share in the total approved budget allocations have tended to decrease since 2015 (in 2015: RUB 3.2 bln and 65.4%; in 2016: RUB 2.9 bln. and 61.3%; in 2017: RUB 2.3 bln and 56.6%). As compared to 2015, the decline was 8.8 percentage points.
The analysis showed that in 2017, the allocations were fully executed under none of the Union State’s programs in general. At the same time, in the Russian Federation, the planned expenditures were executed in full under five programs; and under four programs, the execution level was 99% and more. In the Republic of Belarus, the program execution level ranged from 25.4% to 99.2%.
The budget cash expenditures of the Union State for holding 26 events were RUB 1.2 bln or 97.7% of the intended amount. In 2017, the expenditures were executed in full for 7 of 26 events (mainly in the Russian Federation). The lowest percentage of cash expenditures execution was that for the event “Awards in the Field of Literature and Art” (69.8%), as well as for the events dedicated to the Day of Unity of the Peoples of Russia and Belarus (80.5%). The expenditures for the event “Sports Festival of the Union State for Children and Youth” were executed by 89%. For the remaining 16 events, the level of execution ranged from 90.4% to 99.7%.
The main reasons for non-execution were the long time of approving the cost estimates for holding such events; the late opening of financing, the long procurement procedures; the late submission of invoices by contractors for work performed (services provided); the postponement of a number of events; the late approval of the Union State’s new programs. A similar situation with the Union State’s budget execution was observed in previous years.
The Board decided to submit an operational report to the Parliamentary Assembly of the Union of Belarus and Russia and to the Standing Committee of the Union State.