Slide . The Title
Good afternoon, thank you for the opportunity to speak in front of such a distinguished audience. The Accounts Chamber gives a high value to the automated processes for the external state audit. To enhance efficiency, we developed and implemented information-analytical system of remote external state audit (to make this presentation sound simple I will use the term "information system").
Slide 1. Remote audit and control capabilities, the necessary legal framework and conditions for it
Remote audit allows to conduct a continuous monitoring and control of organizations - objects of audit and control activities, respectively, to deliver information about their activities and promptly respond upon the occurrence of relevant events, in contrast to frequency of information obtaining provided only on the basis of control and expert-analytical activities when visiting the objects of audit and control.
When conducting the remote audit, a part of the control actions is provided automatically in the information system in contrast to manual control during the control actions when visiting the object of control.
Most of the information, which is being operated in the activity of our inspectors, is available via the information system. It became possible thanks to the deep integration of information system with external information systems, including systems of Federal bodies of State Authorities.
In terms of integration, the Accounts Chamber is provided with full access to the data of external information systems, as well as the possibility of direct transmission of these data to the information system for further processing. Integration with external information systems is directly connected with the possibilities offered by current legislation. In this sense the Federal law "On the Accounts Chamber of the Russian Federation" provides us with a broad base, which allows obtaining information about the composition and data structures of external information systems, and implementing the connection to them with the help of specialized hardware and software systems.
However, at the present moment some of the Federal bodies of State Authorities lack information systems and technologies developed at a sufficient level, which, respectively, does not allow conducting remote audit and control of their activities. One of the ways to change the situation was the legislative amendment in the terms of granting the Accounts Chamber the authority to provide Federal Executive Authorities with the recommendations concerning the composition and procedure of forming the data of Federal state information systems.
Slide 2. The purpose and the goal of creating an information system
Information system was developed and implemented for the activities on preparation and directly conducting the state audit and control activities. The information system provides the ability to the inspection staff to search for and to obtain all the necessary information on activities of control objects, including source documents, to identify automatically the violations in their activities and to use the results of the automatically generated analysis reports.
Information system allows increasing the efficiency and validity of decision-making at the stage of formation of the inspection plans and planning of activities of the Accounts Chamber as a whole.
Slide 3. Principles and approaches required to create information system
When creating the information system we applied such a principles and approaches that were most effective in carrying out the state audit and control on the basis of remote access to external information systems.
We proceeded from the following:
1) Information system uses to the full the data directly proceeded in information systems of federal state bodies (that is, using the information system, users work with data and information in the information systems of federal state bodies);
2) Under the cooperation with federal state bodies we take measures to ensure the availability of necessary data and information required by the Accounts Chamber in information systems of federal state bodies, and made sure that they implement necessary analytics required by the Accounts Chamber;
3) The Information system of the Accounts Chamber receives data from information systems of federal state bodies (that is, the data is transferred to the Chamber of Accounts) only for the following:
- automated detection of violations;
- formation of analytics that is impossible to realize in information systems of federal state bodies (e.g.: the formation of analytics is carried out on the basis of external information systems of different state bodies).
Thus, the information system is able to provide its users with all data from the information systems of federal bodies in online mode. At the same time, the Accounts Chamber when creating an information system doesn’t to bear significant budgetary expenditures and it doesn’t take much time to implement the remote audit information system technology.
And in terms of audited entities, there are no costs to be borne by the Accounts Chamber for the remote audit.
Slide 4. Main functional capabilities of information system
The basic functional capabilities of the information system are presented on the slide. I would like to draw attention to some of its functional features.
Information system has developed a search mechanism which in addition to the standard set of tools (basic search, advanced search, search by subject headings) provides the User with the ability to use algorithms of the search of violations for automated detection of violations committed in objects of control.
So, we have developed about 80 algorithms, i.e. automated types of violations, which provide invaluable help to the inspectors when inspecting the activities of control objects. Automated detection of violations is performed without any participation of the Accounts Chamber staff. For example, the use of such algorithms in the analysis of the official site of the unified information system in the procurement area allows you within minutes to compile statistics on the systematic violations of the venues for the forthcoming inspections. At the same time, the Accounts Chamber constantly conducts activities to increase the number of types of automatically detected violations
The information system also offers Users the opportunity to use the results of the analytical reports generated by the system in automatic mode. For example, the system generates analytical reports in the field of public procurement, achievement of the targets of state programs, expenditures and revenues of the Federal budget.
The information system has the capability of comparing the data contained in the various external information systems of Federal bodies of State Authorities. This is important because the detection of discrepancies or contradictions in a potentially similar data is a sign of a breach.
Slide 5. Statistics of expansion of functional capabilities of the information system
The slide shows some figures describing the current status of the information system. In just two years of system functioning (launched in May 2015) it has managed to achieve a significant increase of indicators, which determine efficiency of information system.
So, at this point of time the information system is connected to 130 external information systems; 30 federal authority bodies provide the data required for system operation.
The work to develop the effectiveness of the information system, including the expansion of its functionality is carried out on a regular basis. Currently we are working on adding to the capabilities of the information system an option of semantic text analysis in order to search for occurring violations (it is planned that the system will have this option already at the start of 2018). Automated semantic analysis of texts in search of violations has undoubtful benefits to the activities of the Accounts Chamber, as it means a substantial optimization of business processes.
For example, the use of semantic analysis of texts of government contracts and documents for work performed will allow inspectors to automatically identify the facts of nonconformity in the composition of works that were to be performed to the actual ones.
Slide 6. Users information support
Support of information system is organized in such a way as to receive effective feedback from its Users. You can see the main points on the slide.
Due to the fact that the information system has a large amount of information obtained from external information systems; the system has 4 ways of providing information support (as shown on this slide), so the inspectors of the Accounts Chamber could use the information effectively.
Slide 7. Statistics on work results of the Accounts Chamber in 2016
The slide shows the key indicators that the Accounts Chamber has reached following the results of activity in 2016. Please pay special attention to the number of identified by us violations. So, from 4,000 violations identified by the Chamber of Accounts during inspections, 600 of them were revealed automatically using the information system and in other words were revealed through the external information system, with the help of above mentioned algorithms. The indicator shows how truly significant the contribution of the information system is to the operational activities of the Accounts Chamber.
Slide 8. Automated detection of violations
This slide provides a real example of the violation of state contract date taken from the information system and detected by the Automated Deviation Detection System during the public procurement. The system is able to provide the User with all necessary information, including electronic documents.
If we need to conduct a report based on the activities of the various Federal authorities it shall be realized through the information system by transmitting and processing information from their respective information systems.
Slide 9. Analytical reports construction
The information system, as I mentioned earlier, has a well-developed analytical component, allowing inspectors to significantly save time and rationally plan their work. I would like to draw your attention to the following aspect: The information system using analytical component generates its own interim database with all required information.
The information systems of the audited entities contain a large amount of data to which the Accounts Chamber has full access. However, sometimes for the proficient work such a comprehensive data is not required. Therefore, that interim database formed by our system can easily change configuration and adapt to current needs. This slide shows an example of a formed database with all necessary information (particularly interesting information from two sources, from the Federal Tax Service server and the Unified Budget System Portal server, which is used in the analytic report generated by the information system and saved on the server of the Accounts Chamber).
Slide 10. Process optimization for querying, receiving, and storing data
The slide shows an example of how to form analysis reports based on the data provided by the official website of the Unified Information System in the procurement area. The information system selects only data needed for the reports. The rest of the data shall be saved on the source server of the relevant public authority.
Slide 11. Storage, search and access to reports and documents
The information system also allows storage, search and display of documentation necessary for inspections. Using the system, our inspectors can find any particular document by selecting specific options in the filter for this document.
The information system provides access to tens of thousands of documents. The user sets the necessary parameters on the basis of which he is provided with the necessary documents (an example is shown on the slide). The main parameters for selecting the required documents are the following:
- the organization that formed the document;
- the organization about which information is presented in the document;
- the subject to which the document relates;
- type of document, reporting;
- level and name of the budget;
- the reporting period.
Thus, the inspector might not even know where exactly the information is saved in the external information system, but he will find and get access to it by selecting required filter options.
Slide 12. Search and access to primary data (documents)
As was mentioned earlier, through the information system the Inspectors are able to work directly with primary data from the information systems of federal state bodies. For example, users work with paysheet documents, formed during the execution of the federal budget, accounts for the supply of goods, works and services.
In other words, the information system eliminates the need for the inspectors to waste their time on sending requests for primary data from the audited entities.
Slide 13. Process optimization for querying, receiving, and storing data
Among other things, the information system addresses the challenges of optimizing the process of querying, receiving, and storing the data.
Taking into account the fact, that the Accounts Chamber now uses that information system, having full access to electronic documents posted in the information systems of federal state bodies, the process of filling out requests for information by the inspectors has become obsolete.
In doing so, it is invaluable for the Accounts Chamber to receive electronic information on the Internal Financial Audit conducted by the federal state bodies. The Internal Financial Audit report is automatically compared to the external state control indicators of the Accounts Chamber and is further analyzed and assessed in order to determine and implement subsequent remedial measures by the public authorities for improvement.
Slide 14. Algorithm of audit with the Information system
As I said before, we are looking for the ways to improve the information system on an ongoing basis. And one of the ways to modernize the system is to automatize the standards of State Auditing and Control activities adopted by the Accounts Chamber.
Since 2018, it is planned to implement the actions established by the standards of state audit and control, with the use of an information system and data processing of information systems of federal public authorities.
Slide 15. Risk-based approach to the activities with the IAS of RESA.
The information system gives the opportunity to apply a risk-oriented approach to audit activities. In other words, receiving information on certain parameters of the audited entity, the inspectors might in a more substantiated way decide on the definition of the item and the object of control.
Those parameters are the following: : (1) The number of violations by the audited entity over past periods; (2) The amount of funds allocated to the audited entity in the current period; (3) The number of violations in the area of activity during past periods; (4) The amount of funds allocated to the area of activity in the current period; (5) The number of violations detected automatically.
Slide. Thank you for your attention!
In conclusion, I would like to point out that we are focusing on the wider distribution of best audit practices, including optimal approaches to automated work processes for the external public audit body. We have formulated draft proposals for the development of international standards of remote audit and control with application of IT-technologies. The proposals were based on the analysis of our experience in development, implementation and maintenance of the Accounts Chamber Information System. The proposals were sent to the International Organization of Supreme Audit Institutions (INTOSAI), and I hope that our colleagues will find them useful.
Thank you for your attention!
Chairwoman of the Accounts Сhamber of the Russian Federation Tatyana Golikova has met with the Auditor General of the Kingdom of Norway Per-Christian Foss.
During the meeting the heads of the Supreme Audit Institutions of the two countries noted the high level of interdepartmental cooperation and reaffirmed their readiness for further development and strengthening of relations.
"For more than ten years our institutions have had a purely practical dialogue. In the years of our work together a range of control activities have been carried out in such areas as fisheries and aquatic resources of the Barents and Norwegian seas, radiation safety of the population and environmental protection from radioactive contamination" - said the head of the Accounts Chamber of Russia.
Special attention, according to the participants, deserves a five-party audit on the subject of the Arctic Council, conducted by Supreme Audit Institutions of Denmark, Norway, Russia, USA and Sweden, as well as control bodies of Russian regions.
The next step in collaboration between the two agencies, taking into consideration the urgency of the ecological safety problems for adjacent territories of the two countries, will be to hold in the future a parallel audit - "the audit of implementation by the state bodies and organizations of Russia and Norway of the agreement between the Government of the Russian Federation and the Government of the Kingdom of Norway on cooperation in the field of environmental protection dated September 3, 1992".
"Our new project will affect fields of biodiversity, cross-border cooperation and environmental pollution reduction, which are highly important for both countries. It is symbolic that the implementation of this project starts in 2017, considering this year has been proclaimed as the Year of environmental protection in Russia", - said Tatyana Golikova.
In the framework of the forthcoming audit, the parties intend to consider a range of issues, including the evaluation of the effectiveness of state bodies on: designing and maintaining special natural areas, the conservation of populations of rare species of birds and animals, including polar bears and Atlantic walruses; the implementation of measures to eliminate environmental damage and to reduce air radioactivity. This parallel audit will be conducted with the participation of the Chamber of accounts of the Arkhangelsk region.
Following the meeting, the parties signed an agreement on parallel audit, as well as the new version of the Agreement on cooperation between the Accounts Chamber of the Russian Federation and the Office of the Auditor General of the Kingdom of Norway.
"The signing of these two documents, - said Tatyana Golikova,- is an important step in our bilateral relations, showing our firm intentions to continue and further develop the level of practical cooperation, which is especially important in today's difficult economic situation. I'm sure that the upcoming collaboration will not only bring another worthy contribution to the bilateral relations between our institutions, but will also give a new impetus to the development of relations between Russia and Norway".
The meeting was attended by the Ambassador Extraordinary and Plenipotentiary of the Kingdom of Norway to the Russian Federation Leidulv Namtvedt, auditor of the Accounts Chamber of the Russian Federation Bato-Zhargal Zhambalnimbuev and the Chairman of the Chamber of accounts of the Arkhangelsk region Alexander Dementyev.
Russian tax plan could put pressure on budget and inflation: audit chief
A Russian finance ministry proposal to overhaul the tax system could create a budget shortfall and put upward pressure on inflation, Tatiana Golikova, the head of Russia's Audit Chamber, told Reuters in an interview
The ministry has proposed cutting employers' mandatory social security contributions with the aim of enticing businesses out of the shadow economy. To offset that, it proposes increasing value added tax (VAT) to 22 percent from 18 percent.
The ministry wants the combined change to take effect from 2019. But the intervention from Golikova, an influential former government minister and deputy finance minister, indicates the proposal could face resistance from some quarters in ruling circles.
Golikova, whose audit chamber is responsible for monitoring whether the government is using budget spending effectively, said the changes would force the government to increase its support for the pension fund.
The finance ministry's proposal is to cut employers' social security contributions to 22 percent of a worker's salary from their current level of 30 percent. A part of the contributions goes into the state pension fund to help keep it topped up.
The fund is already in deficit, a problem the finance ministry itself says needs to be addressed, and the drop in social security contributions will mean that less money is going into the fund, she said.
Asked if the proposed tax changes would increase the burden on the budget, Golikova said: "In this conception, in this construction, yes."
The Russian budget had to provide around 3.4 trillion rubles ($17.40 billion) to cover the Pension Fund's liabilities last year, an extra burden on a budget already straining under low tax revenues.
According to the Chamber's calculations, under the finance ministry's proposal social security payments would go down by 1.5 trillion rubles while revenues from VAT would increase by only 1.3 trillion rubles.
In the interview, Golikova said the other consequence of the proposed tax changes would be on inflation, which the central bank is seeking to get under its target of 4 percent by the end of 2017.
The finance ministry has acknowledged that the VAT increase may result in a one-off 2-percentage-point increase in inflation. Golikova said that would have far-reaching consequences for monetary policy and for ordinary people.
"This (proposal) means that a half or even more of that 4 percent (of inflation)... would be made by our own hands... This means that the central bank will have to make additional efforts to maintain the inflation level," Golikova said.
"This is a significant factor affecting social policy."
Prices rose 4.6 percent in the year to February. Upward pressure on inflation could force the central bank to keep interest rates higher for longer than it would otherwise have done, constraining an economic recovery.
Golikova said the Audit Chamber had yet to calculate how the proposal would affect economic growth. The Russian economy shrank 0.2 percent in 2016 and the economy ministry expects it to grow by 2 percent this year.
(Additional reporting and writing by Katya Golubkova; Editing by Christian Lowe and Mark Trevelyan)
By Darya Korsunskaya and Polina Nikolskaya
Published by «REUTERS», 21.03.2017
A working meeting of the Supreme Audit Institutions of Russia and Norway on joint auditing activities in the field of environmental protection as well as a roundtable for experience exchange in the areas of Social Policy and Healthcare, were held in the Accounts Chamber of the Russian Federation.
Welcoming the participants to the working meeting on behalf of Tatiana Golikova, the Chairwoman of the Accounts Chamber, the auditor of the Supreme Audit Institution of Russia, Bato-Zhargal Zhambalnimbuev, specifically noted the high level of cooperation between the supreme audit institutions of two countries. "The relations between the Supreme Audit Institutions of our countries have a long history", he stated. "In this regard, our cooperation has always been interesting, fruitful and mutually beneficial."
"Russia-Norway relations in the field of environmental protection lately have been developing very fruitfully, as evidenced by the implementation of a large number of projects in this area." "I am confident that the recommendations of the Supreme Audit Institutions of two countries based on the joint control work in this area have contributed greatly to the improvement of these relations. ," noted Bato-Zhargal Zhambalnimbuev. He also informed Norwegian colleagues that the President of the Russian Federation declared 2017 to be the Year of Ecology in Russia.
Taking into account the relevance of environmental security issues to the neighboring territories of the two countries, in 2016 the parties decided to continue interdepartmental cooperation in this area in the framework of the next joint parallel performance audits of Russia-Norway co-operation effectiveness in the field of the environmental protection.
During the working meeting, participants discussed a number of organizational issues related to the forthcoming joint work, considered a draft agreement on parallel audits, and defined its main goals and objectives.
The signing of the mentioned document and the updated version of the Cooperation Agreement between the Accounts Chamber of the Russian Federation and the Office of the Auditor General of the Kingdom of Norway, has been scheduled for April 2017 during the official visit of the Auditor General of Norway, Christian Foss, to Moscow.
At the roundtable session on Social issues a really thorough exchange of expertise occurred in two areas: Social Policy and Healthcare issues.
The role of the moderator for the Social Policy Section has been given to Olga Samarina, Director for Expert, Analytical and Control activities in the area of expenditures of the Federal Budget for Fundamental research, Physical Culture, Sport, Social Policy; of the funds of the Pension Fund of the Russian Federation; of the Social Insurance Fund of the Russian Federation. The attention of the parties has mainly centered on the implementation of the state support for families with children in Norway and Russia.
Also, a healthcare topic became the major focus of discussion. The role of the moderator for the life discussion session has been played by the Head of the Office of the Accounts Chamber, Yury Voronin. On the Russian side, the report on the structure of the healthcare system in the Russian Federation and the principles of its financing was presented by the Director for Expert, Analytical and Control activities in the area of expenditures of the Federal Budget for Healthcare, Education, Culture, Cinematography and the funds of the Federal Compulsory Medical Insurance Fund of the Accounts Chamber, Olga Krivonos.
The President of Russia, Vladimir Putin, has signed the Federal Law on amending the Federal Law “On the Accounts Chamber of the Russian Federation” and Article 28.3 of "the Code of the Russian Federation on Administrative Offenses".
The signed law clarifies and specifies certain provisions laid down by the Federal Law No. 41-FZ “On the Accounts Chamber of the Russian Federation” and the Code of Administrative Offences and is aimed to improve legislation in the area of external public audit (control). The document also will provide a unified framework for certain provisions of the Law “On the Accounts Chamber of the Russian Federation” and the provisions of the Budget Code of the Russian Federation, the latter has been updated in 2013.
Furthermore, into the list of reasons for early release of an auditor of the Accounts Chamber of the Russian Federation from his office as stated by the newly signed law was included: improper performance of official duties falling within the auditor competence; the chair of the Accounts Chamber from now on will be given the right to inform the President of the Russian Federation of such matters.
The new law gives the Accounts Chamber of the Russian Federation the authority to provide an opinion on the candidates for the post of the Chair of the local control authority and access their compliance with the requirements laid down by the Federal Law "On general principles of organization and activities of control and audit bodies of the RF subjects and municipalities."
Moreover, according to the new law, the list of objects of audit (control) of the Accounts Chamber of the Russian Federation from now one will include commercial organizations with shares (contributions) of economic associations and companies with the participation of the Russian Federation in their (share) authorized capital. The Accounts Chamber shall be empowered to carry out an external public audit (control) of the legal entities, individual entrepreneurs and natural persons such as producers of goods and services regarding their compliance with conditions of State (municipal) contracts.
During the XXII INCOSAI in Abu-Dhabi (the United Arab Emirates), the Chairwoman of the Accounts Chamber of the Russian Federation Tatiana Golikova have had a bilateral talks with the leaders and representatives of the Supreme Audit Institutions (SAI) of Hungary, Italy, Cuba, Norway, Slovakia, and the RSA.
On the bilateral meeting of the Chairwoman of Accounts Chamber of Russia and the RSA Auditor General Mr Kimi Makwetu the parties expressed mutual readiness for further development of cooperation, including parallel audits, both bilateral and with the participation of others SAIs of member-states of BRICS. One of the themes of such interaction could be the examination of energy sector. “Today, the development of energy, namely atomic and hydrocarbonic ones, seems to be the most promising direction under the given format of interaction”, underlined Tatiana Golikova, offering to take this point into consideration during the development of the framework program for collaboration of the Supreme Audit Institutions of the BRICS states with respect to the INTOSAI activity.
The Russian party also offered to examine the possibility to sign an updated Cooperation Agreement between the Supreme Audit Institutions of Russia and the RSA (2010), which is a subject to planned practical consideration.
Within the framework of the multilateral cooperation development the Chairwoman of Russian Accounts Chamber informed her South African colleagues about the intention to create a special INTOSAI group tasked with matters of informational openness of SAIs and proposed to join this project.
In his turn, the South African Auditor General noted the active collaboration of two institutions in the Working Group on Public Procurement Audit with the Working Group on KNI concerning the audit of government procurement. Also, Kimi Makwetu offered the Russian SAI to join the INTOSAI Committee on SAI potential growth, and specifically, to take part in the group activity of conducting coordinated audits.
During the meeting with the Auditor General of the Italian Accounts Chamber Mr. Claudio Galtieri, the Russian party proposed to add some practical meaning to the bilateral relations between Russian and Italian SAIs. As the first step towards this goal Tatiana Golikova offered her colleague to sign an updated version of the Italian and Russian Cooperation Agreement (2002) in consideration of their future practical interaction.
The two parties also discussed the possibility of mutual work in the framework of the EUROSAI Working Group on the Audit of Funds Allocated to Disasters and Catastrophes, and to conduct a coordinated audit of matters related to earthquake disasters. The Italian party confirmed that the next meeting of the Group will take place in Rome in March 29-31, 2017.
Moreover, the parties came to an agreement about the experience exchange in such spheres as SAI collaboration with judicial authority and fight against corruption.
During the meeting of the delegations of the SAIs if of Russia and Norway the question of forthcoming bilateral audit in the sphere of environmental protection was discussed.
In this regard Tatiana Golikova informed her Norwegian colleagues about the beginning of the priority program “Clean Country” since January, 1, 2017, and also about the fact that the next year is declared the Year of Ecology. “These themes will coincide with our planned audit”, she said.
The parties agreed that the Accounts Chamber of Russia will provide the Norwegian SAI with the results of these activities, conducted to implement this project.
Moreover, the readiness of Russia and Norway to sign an updated version of the Cooperation Agreement (2007) in April 2017 during the official visit of the Norwegian Auditor General P.K. Foss to Moscow was confirmed.
Tatiana Golikova invited the Norwegian Auditor General to participate in the International Economic Forum in Saint-Petersburg in 2017 and offered the Norwegian colleagues to join the INTOSAI Task Force on SAI Information Transparency.
The main topic of the talks between Tatiana Golikova and the Cuban Auditor General Gladys María Bejerano Portela was the question concerning the preparation of two parallel audits in the sphere of civil aviation (in 2017) and in the energy sector (in 2018).
During the meeting the Cuban party received the information about the results of the expert analytical event, conducted by the Accounts Chamber of the Russian Federation in 2016 as part of preparations for the bilateral audit of matters related to civil aviation.
As a result, the parties agreed to exchange official visits. The Cuban party also accepted Tatiana Golikova’s invitation to join the INTOSAI Task Force on SAI Information Transparency.
During the meeting with the Deputy Chairman of the Slovakian Audit Office Igor Shulay, the parties outlined the major directions of further cooperation – from experience exchange to the conduct of mutual and parallel audits.
Namely, the parties expressed readiness to share the audit information in the energy and health sectors, as well as the materials on the project planning.
It was pointed out, that the parties planned to start cooperation of two SAIs within the frame of the Working Groups on KNI and on Procurement Contract Audit.
Moreover, the Accounts Chamber invited their Slovakian colleagues to take part in the INOSAI Task Force on SAI Information Transparency and expressed readiness to provide the necessary materials.
During the meeting with the representatives of the Hungarian SAI, particular attention was paid to a discussion of the questions concerning the audit of large-scale sport projects. Hungarian supervisors were especially concerned with the methodology of conduct of such control events.
In this regard, the Hungarian party invited the Russian Accounts Chamber to take part in the Seminar, which will take place in Budapest in March 2017, to exchange experiences in the sector of audit of large-scale sport projects.
In 2019 the Accounts Chamber of the Russian Federation will host the XXIII INTOSAI Congress – the largest international forum for the audit community.
The decision to approve the Russian Supreme Audit Institution as a host for the next Congress meeting was adopted unanimously by the participants of the XXII INCOSAI, which took place from 7 to 10 December 2016 in Abu Dhabi, the United Arab Emirates.
The Chairwoman of the Accounts Chamber of the Russian Federation Tatiana Golikova in her speech thanked the participants of the forum for supporting Russia’s candidacy to be the hosting country for the XXIII INCOSAI. She noted that the accumulated experience of the Russian SAI in organizing major international events leaves no doubt about the success of the XXIII INTOSAI Congress held in Moscow. “For us it is not only a great honour, it is also a huge responsibility”, said Tatiana Golikova.
As part of the forum the Russian delegation submitted a report concerning the results of the two INTOSAI working bodies headed by the Russian SAI – Working Group on the Key National Indicators (KNI) and the Task Force on Procurement Contract Audit.
After hearing reports from the Russian party the Congress participants expressed appreciation of the results achieved.
Among the main achievements of the Task Force on Procurement Contract Audit several things were noted, the development of the Glossary and Practice Guidance on public procurement audit, and two pilot projects organized along with the supreme audit institution of Portugal, Slovenia, and Zambia. The Congress participants also supported the initiative of the Russian SAI to transform thetask force into the Working group and to continue development of the INTOSAI Public Procurement Audit Standard until the end of 2019.
The main result of the Working group activity concerning the key national indicators was the development of the KNI WhitePaper with concrete recommendations on the KNI development and usages, as well as the Guidance Document for the KNI use in SAIs activities. Currently the group plans to join INTOSAI to achieve sustainable development goals, to work out a standard for the application of the key national indicators to the SAIs activity, and to create methodological recommendations on program and project audit.
The Collegium of the Accounts Chamber of the Russian Federation chaired by Tatyana Golikova considered the findings of the expert and analytical activity entitled “Analysis of measures taken by federal executive authorities and organizations of the Russian Federation in the framework of implementation of projects to supply Russian civil aircraft, auxiliary equipment and services under the programs of modernization of the Cuban civil aviation”.
Entities to be analyzed: Ministry of Finance of the Russian Federation,Ministry of Industry and Trade of the Russian Federation,Roseksimbank JSC; Ilyushin Finance Co. JSC.
Audited period: 2014-2015 and 2016 to date.
Auditor of the Accounts Chamber Aleksandr Zhdankov made a presentation.
As it was noted at the Collegium, the cooperation between Russia and Cuba in the area of aviation industry is currently carried out through the implementation of the Program of trade, economic, scientific and technical cooperation between the Government of the Russian Federation and the Government of the Republic of Cuba for 2012-2020 signed on the basis of the results of the 10th Meeting of the Russian-Cuban Intergovernmental Commission in November 2012*.
The export of Russian aircraft and auxiliary equipment to the Republic of Cuba is ensured by the state guarantee support of the export of industrial products, which are delivered in accordance with laws and regulations of the Russian Federation currently in force.
Since 2005, the maximum amount of the state guarantee support for aircraft delivery to Cuba has exceeded $600 mln.
The total amount of long-term loans (from 10 to 14 years), secured by state guarantees of the Russian Federation and provided within the period from 2005 to 2016, amounted to 432 mln.
There were no facts of call for a guarantee in the examined period. There are no arrears on repayment of loans and payment of interest. The refund of the principal debt amount and payment of interest on loans are carried out in full, in accordance with the terms of loan agreements and on the basis of payment schedules.
As of the period of the audit, all agreements for the delivery of aircraft and equipment entered into within the period since 2014 and in 2016 to date have been fulfilled.
“Altogether, within the period from 2006 to 2016, 14 aircraft were delivered to the Republic of Cuba, including: in 2006-2013 - 3 IL-96 aircraft, 2 TU-204 passenger airplanes, 2 TU-204 air-freighters and 3 AN-158 airplanes; in 2014-2016 - 3 AN-158 airplanes (under agreements entered into in 2013) and one IL-96-300 airplane”, informed Aleksandr Zhdankov in his speech.
Besides, in the frame of cooperation in the area of helicopter machinery delivery, two Mi-17-1V helicopters were delivered to Cuba in 2016; a number of commercial proposals were also made regarding the maintenance of helicopters delivered and the delivery of repair and design documentation for their overhaul.
At the same time, the analysis showed that a number of issues of cooperation between Russia and Cuba in the area of civil aviation have not been solved yet.
In particular, a new training center in Habana, which is provided for in the Cooperation Program, has not been established yet. Taking into account difficult financial situation in Cuba, the negotiations have now been suspended. Besides, the retraining of Cuban specialists was carried out in the frame of contracts for delivery of AN-158 airplanes: the price of every plane to be delivered includes the retraining of 17 persons.
The problem of airworthiness maintenance of aircraft delivered to Cuba is still acute. The idea to establish a spare parts warehouse in Cuba, which has been discussed since 2010, has not been implemented yet.
There is another problem associated with non-compliance by the Cuban party of the timing for sending defective parts and failed units for repair (the period provided for by the Agreement is 10 days, but the actual period of sending units to repair was up to 4.5 years). Russian manufacturers, from their part, are also unable to reduce the time of repair. The manufacturing cycle duration for certain components required by the Cuban party is 120 to 270 days. Besides, it should be noted that within the audited period, the parties developed measures to timely delivery of spare parts and units, which allowed reducing the periods of sending failed parts for repair from several years to 1-3 months.
Moreover, the parties have not still agreed upon the Plan of the Program Implementation. The auditor noted that “The timing of specific projects and responsible persons have not been determined, which hinders significantly the Program implementation monitoring”.
Supreme audit institutions of Russia, Armenia, Belarus, Kazakhstan and Kirgizia held a joint Collegium meeting in the format of a videoconference.
At the meeting, which was held, for the first time, in a pentalateral format, the participants reviewed the findings of the audit of observance by authorized bodies of the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation of the Protocol on the Procedure for crediting and distributing import customs duty proceeds (other equivalent duties, taxes and levies) and their transfer to the budget revenue of the Eurasian Economic Union Member States, in 2015.
In her welcoming speech at the opening of the pentalateral Collegium meeting, the Head of the Russian control body noted that nowadays the cooperation in the frame of the Eurasian Economic Union is one of the main priorities and instruments of the member states’ economic policy. “The Union is developing steadily. Certain success has been achieved in the development of the contractual and legal framework. The signing of a new EEU Customs Code is expected soon, which will allow moving towards a unified customs regulation and raise the administration mechanisms to a totally new level,” Tatyana Golikova emphasized.
At the same time, the Chairwoman of the Accounts Chamber of the Russian Federation regretted that the Eurasian Economic Commission has not approved so far an Agreement on conducting joint control activities by audit institutions to verify the observance of the procedure for crediting and distributing import customs duty proceeds. “Due to this fact, while conducting the first pentalateral audit this year, we were forced to rely upon the tried and tested practice of such audits within the frame of the Customs Union. Undoubtedly, this solution could not be called an ideal one in view of the enhancement of integration development,” Tatyana Golikova noted.
Representatives of audit institutions of the five countries made presentations at the Collegium, with Auditor of the Accounts Chamber of the Russian Federation Sergey Shtogrin speaking on behalf of the Russian party.
The parties were unanimous in the assessment of the audit findings, stating that in 2015, the authorized bodies of the EEU Member States generally ensured the observance of the procedure for the distribution of import customs duties. Import customs duties were distributed in accordance with the rates* established for each Party.
The total amount of import customs duties credited in 2015 to the Parties’ budgets amounted to $10.6 billion.
“In comparison with 2014, the revenues of customs duties tend to decrease by $8.8 billion or 45.4%”, Auditor of the Russian audit institution Sergey Shtogrin noted in his speech.
The sum of 556.5 billion Russian rubles in the national currency was credited to the budget of the Russian Federation, 35.6 billion drams - to the budget of the Republic of Armenia, 8.6 trillion Belorussian rubles - to the budget of the Republic of Belarus, 188.5 billion tenges - to the budget of the Republic of Kazakhstan, 3.1 billion soms - to the budget of the Kyrgyz Republic.
At the same time, certain concern and weaknesses have been identified in the framework of the joint audit, including those associated with crediting of the sums of customs duties to undistributable accounts. “While the amount of revenues of such duties is to decrease from year to year, in 2015 there was a sharp increase therein. For instance, in the Republic of Kazakhstan, the sum of such revenues increased 7.7 times and amounted to 4.3 billion tenges”, Sergey Shtogrin noted.
Besides, as in the previous year, a significant portion of retained revenues in the Republic of Kazakhstan (664.7 mln tenges) is associated with the customs clearance of goods by companies whose activities are related to subsoil use and is covered by Article 372 of the Customs Code of the Customs Union**. However, according to the information received from the Eurasian Commission based on the study of this issue, the customs legislation only governs the issues associated with the payment (collection) of customs duties in respect of the goods transported across the customs border of the Eurasian Economic Union. At the same time, it does not apply to issues related to their subsequent crediting and distribution. The procedure for the crediting and distribution thereof is determined by the relevant Agreement dated May 20, 2010***, and from January 01, 2015 onwards - by the Protocol, which govern the issues in interbudgetary relations of the EEU Member States and involve the treasury aspects of interaction. To that end, starting from September 01, 2010, customs duties, including those paid by organizations acting under Article 372 of the Customs Code, shall be subject to distribution among the budgets of the EEU Member States.
Import customs duties to the amount of 22.1 mln soms have been unjustifiably credited to the undistributable account in the Kyrgyz Republic (76.8% of the total amount of revenues selected for the audit). The violation has been corrected, the specified funds were distributed in 2016.
The reports on the state budget execution for 2015 in the Republic of Armenia and Kyrgyz Republic were drawn up without regard to the rules of the Protocol in terms of completeness of recognition of the amounts of import customs duties: the sums of duties in the amount of 2.8 mln drams and 1.1 mln soms, accordingly, credited on the last business day of the calendar year were not recognized in the said reporting.
As of the time of the joint control activity, the technological documents regulating the communication in the frame of implementation of the foreign and mutual trade by means of the integrated information system, had not been approved by decision of the EEU Collegium.
Until now, there is no regulation of the mechanism to credit and distribute social protection and anti-dumping duties, where the obligation to pay them arose prior to the entry into force of the EEU Agreement, taking into account the joining of Armenia and Kyrgyzstan to the process of distribution of these duties.
According to the representative of the Eurasian Economic Commission, who was present at the joint Collegium meeting, the Eurasian Economic Commission is currently actively working on the elimination of shortcomings identified and settlement of problems. In particular, he said that the technological documents governing the communication had already been approved by the Collegium of the Eurasian Economic Commission. In the framework of improvement of the EEU Agreement provisions, the Commission has also initiated the solution of the issue regarding the procedure for crediting and distribution of social protection and anti-dumping duties, where the obligation to pay them arose prior to the entry of the Agreement into force. The unified position on this issue was approved based on the discussions. The work is currently being carried out to elaborate and approve relevant changes to the Protocol.
As for the Agreement on conducting by supreme audit institutions of the EEU Member States of joint control activities by audit institutions to verify the observance of the procedure for crediting and distributing import customs duty proceeds, the representative of the Commission informed that the draft had been sent to the Parties for approval on the national level. Besides, he expressed his hope that this important document would be signed in the nearest future.
Based on the results of the meeting, the participants of the joint Collegium adopted the decision to send the audit report to the governments of the Russian Federation, the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan and the Kyrgyz Republic. The Accounts Chamber of the Russian Federation will also send the audit report to the Chambers of the Federal Assembly of the Russian Federation and the Eurasian Economic Commission.
In conclusion, the parties once again emphasized the importance of the early signing of the Agreement, which would govern the work of supreme audit institutions in the frame of joint audits. In the opinion of the participants of the meeting, this would allow not only avoiding those difficulties which they had encountered in the course of the audit, but also improving the efficiency and the level of inter-agency cooperation.
Tatyana Golikova also invited her colleagues to sign the updated versions of bilateral Cooperation Agreements, which would comply with modern international realities, including the regulatory and legal framework of the EEU pertaining to SAIs’ interaction.
The official pages of the Accounts Chamber of the Russian Federation are already available in social media, such as Facebook, VKontakte, Twitter, and YouTube. Now, the pages in Odnoklassniki and Instagram social media have been added to the list of accounts of the country’s supreme audit institution.
The full-scale presence of the Accounts Chamber in the blogosphere will enable interested users not only to obtain information on the institution’s online activity from a convenient platform, but also to make a question and get an answer thereto or express their opinion and be heard.
Sign for our official pages and be aware of the way federal budget funds are used, what taxes are spent on, and how the budgetary policy of our country is formed.
During the working meeting with President of Russia Vladimir Putin, Tatyana Golikova, the Chairwoman of the Accounts Chamber, reported on the issue of government support of small business.
Tatyana Golikova told the Head of the State that in 2015 a growth of tax revenues to the budget from the small business sphere was recorded. According to the Head of the control agency, “this is a good sign”. “Moreover, there are regions where both the level of creating small and medium business entities and the level of tax revenues significantly exceed the average level in Russia. I would refer the Belgorod Region, the Saratov Region, the Novgorod Region to such regions, where the number of small business entities have exceeded 40% within the past five years - this is a serious progress. As for individual entrepreneurship, which also belongs to this category, the absolute leaders in the sphere are large cities - Moscow, Saint Petersburg and the Leningrad Region,” the Chairwoman of the Accounts Chamber said.
Tatyana Golikova said that the “shadow sector” of economy involves 14.8 million entrepreneurs. “This is the patent system that is intended to bring self-employed citizens out of the shadow economy. When it was introduced in 2013 in the form in which it currently exists, it did not produce the effect that it has produced within the recent period of its existence. I mean the year 2015 as compared with 2014, since these are sensitive years, including from the viewpoint of economic development,” she noted. According to the Chairwoman of the Accounts Chamber, bringing entrepreneurs out of the shadow economy could give the budget about 40 billion rubles of additional income.
Besides, according to the Head of the control agency, the number of citizens and entrepreneurs who work in the frame of the patent system increased by 84% in 2015. “It is encouraging to note that this is the Crimean Federal District. The reason is clear: a 1% rate is set there. While, say, in Moscow and the Moscow Region the rate is 6%. However, the patent taxation system accounts in total for 53.9% in all these three regions. This is essential. Of course, this is mainly retail,” the Chairwoman of the Accounts Chamber said.
Speaking about the existing mechanisms of government support of small business implemented at the expense of the federal budget, Tatyana Golikova evaluated them as “generally efficient”. According to her, 39 billion rubles were allocated for small business support from the federal budget and 250 thousand entrepreneurs received this support. “Improving is needed in the field of collection of information as to which entities go into liquidation and which of them continue to exist. We all work on the basis of Rosstat’s information, however, on August 1, 2016, a register for small and medium businesses and tax base, which is being developed by the Federal Tax Service, is to come into operation,” the Chairwoman of the Accounts Chamber said.
The Head of the control agency said that 853 thousand procurements were announced in 2015 for the participation of small business entities and non-commercial organizations, which exceeds the same indicator of 2014 by 54%.
Tatyana Golikova noted that the MSP Corporation (the corporation for small and medium business development) supported 3,345 projects to the guarantee amount of 17.8 billion rubles in 2015. “This made it possible to attract 38 billion of credit resources to this sphere. I have just made a rough estimation that, if we remove taxes, if we accumulate the government support, if we take into account what public procurements provide, what the MSP Corporations provides, - this is a substantial sum, this is about 346 billion rubles, which we invest in development of small business,” she said.
Tatyana Golikova, the Chairwoman of the Accounts Chamber, took part in the meeting of the Council for Strategic Development and Priority Projects under President of Russia Vladimir Putin.
She declared that the federal budget has internal reserves to maintain priority destinations of government spendings. According to Tatyana Golikova, government priorities should be determined based on the relevant social and economic problems of Russia: “We discussed this issue in details with Dmitry Anatolyevich (Medvedev, the Chairman of the Government of Russia - note) and my colleague Anton Germanovich (Siluanov, the Minister of Finance of Russia - note) and agreed that we have all opportunities to re-orient a number of expenditure items in 2017 to build-in the priorities really relevant for our country and its population.”
The Head of the control agency cited several examples of inefficient budget spending. She mentioned that 103 billion rubles is spent annually to create information systems for federal executive authorities, while annual additional expenditure on their maintenance amount to another 90 billion rubles. “If we look into what we have already created, we will see that 339 government information systems have already been created. If we consider the way they function - whether they contain online information or not - unfortunately we will see rather sad results. Not only have we spent money on the creation of information systems, but we are still spending money on their maintenance”, the Chairwoman of the Accounts Chamber said.
Another example, according to Tatyana Golikova, is related to the process of reorganization of state unitary enterprises, which is to have been completed by January 1, 2018. “Federal executive authorities choose the easiest way, when these enterprises are converted into federal budgetary institutions, public institutions, autonomous institutions, thus, we are forced to spend on them our financial resources which are scarce enough as it is. Besides, in a number of cases it is not clear what functions such state unitary enterprises perform,” she noted. The Chairwoman of the Accounts Chamber added that the federal budget administers 8,884 various types of budgetary institutions with their branches. Besides, the functions of a significant number of such institutions do not correspond to the state functions. “However, we set government targets for them, we assign appropriate budgetary spendings for them. Such an institution costs from 250 to 320 million rubles,” Tatyana Golikova said.
Delegation of the Accounts Chamber headed by auditor Tatyana Manuylova, made a working visit to the Kingdom of Norway to participate in the events dedicated to the 200th anniversary of the state financial control in Norway.
During the meeting, Tatyana Manuylova met Per-Kristian Foss, Auditor General of the Kingdom of Norway.
–In the name and on behalf of Tatyana Golikova, head of the Accounts Chamber of the Russian Federation, the auditor of Russian control agency congratulated Per-Kristian Foss and the entire staff of the Office of the Auditor General of the Kingdom of Norway on the remarkable date – the 200th anniversary of the establishment of the state financial control in Norway. “Today the Office of the Auditor General of Norway is one of the most respected agencies of the Kingdom, and, without a doubt, one of the oldest and most respected representatives of the international audit community”, - she underlined.
In the course of the discussion, the parties highly appreciated the level of interagency cooperation and expressed willingness to its further strengthening and expansion, including with regards to the joint audit work. In particular, it was agreed to hold the control activity for evaluating the findings of the Joint Norwegian-Russian Commission on Environmental Protection.
During the visit, Tatiana Manuylova also participated in the International Symposium, where she presented a report on the experience in the cooperation of the supreme audit authorities of Russia and Norway in the field of auditing.
As a part of the St. Petersburg international economic forum, the bilateral meetings of Tatyana Golikova, Chairman of the Accounts Chamber of the Russian Federation, with the heads of the Supreme Audit Institutions of Azerbaijan, Italy and Mexico, were held.
In the course of the meeting with Vugar Tapdiq oglu Gulmammadov, Chairman of the Accounts Chamber of the Republic of Azerbaijan, Tatyana Golikova noted a high level of Russian-Azerbaijani cooperation, an important component of which consists in the interaction between Supreme Audit Institutions (SAIs) of the two countries. “Our joint work, - she emphasized, - inter alia, within the framework of the working group for state procurements, undoubtedly contributes to the strengthening and development of interstate relations."
In the course of the meeting, the parties discussed prospects for further cooperation, noting that conducting joint and simultaneous control activities is one of the most effective areas giving practical results. In this regard, the parties discussed a possibility of collaboration in the field of control over the implementation of interstate projects.
During the meeting with Rafael Skitiere, Chairman of the Italian Accounts of Chamber, Tatyana Golikova noted that it was the first meeting of the heads of control agencies of Russia and Italy, which took place after a long break. “I hope that in future such meetings will become regular, and the interagency cooperation of Supreme Audit Institutions of our countries will reach a new level", - she noted.
In the course of the meeting, the parties exchanged the information on the main directions of the work performed by the headed agencies, discussed the national features of control, as well as the specific nature of the interaction of the SAIs of Russia and Italy with the legislative and executive authorities of respective countries. Whereby, the commonality of methods and approaches used, was noted.
Following the meeting, the parties expressed willingness to further development of interagency cooperation, both bilaterally and within international organizations.
In the course of the meeting with Juan Manuel Portal, Auditor General of Mexico, the need to enhance interagency cooperation was pointed out, since in the mutual opinion of the parties, the capability of bilateral cooperation between the control agencies of two countries, had been completely implemented yet.
In this regard, Tatyana Golikova proposed to her counterpart to consider a possibility of signing a revised Cooperation Agreement, which sets out the basic forms and directions of further cooperation. “The Agreement between our agencies was signed as early as 2011. However, time goes by placing new demands and challenges before us. I am sure that signing a new Agreement will commence a new stage of joint cooperation”, - the head of the Russian control agency underlined.
Juan Manuel Portal readily supported the proposal of the head of the Accounts Chamber of Russia, expressing an intention to prepare a draft agreement in the light of modern realities and new powers imposed on the control agency of Mexico in connection with the changes in legislation.
Tatyana Golikova, Chairman of the Accounts Chamber, spoke at the St. Petersburg international economic forum (SPIEF 2016) as a part of the panel session “Features of the Budget as an Economic Policy Tool”.
Speaking about effectiveness of budget expenditures, Tatyana Golikova has informed that currently the Accounts Chamber conducts an audit of development institutions. According to the head of the control agency, the federal budget in 2008-2015 invested 4.1 trillion rubles and 6 trillion rubles as direct budgetary investments in the classical development institutions. “Let’s see what happened to this money. First of all, oddly enough, but during the crisis years, despite all state support, efficiency of direct investments fell. Quality of the targeted investment program with the direct budget investments, worsened, its enforceability deteriorated dramatically. It should seem, here’s support, here’s money, so, let’s work, but no, we see an almost 5% drop in performance between 2009 and 2015: the facilities scheduled to be commissioned are only 50% commissioned ", -Tatiana Golikova said.
The head of the control agency added that along with the deterioration in the performance of the Federal targeted investment program in 2008-2015, there had been a growth of the scope of federal budget receivables, i.e. disbursements that had been allocated were not used by contracting organizations. “Practically, we granted credits to contractors. As a rule, the contractors deposited this money. They do not want to withdraw money from those deposits. But the there is always the question: and how effective are those investments in the deposits of our own money? “I can tell you how much it is as of January 1, 2016 - it is 3.3 trillion rubles”, - Tatiana Golikova stated. “Development institutes have created or are creating a non-competitive market, non-competitive procurement in this country. And we, making surrender of our principles, strategic goals we set ourself - establishing competitive economics - go to non-competitive economics”, - the head of the Accounts Chamber resumed.
Also Tatyana Golikova expressed her opinion as to the statement made during the panel session related to increase in Russian government debt. “I am not a supporter of increase in government debt. Just from the perspective of my current position and the position of understanding the problem, I would like to say that there’s the money in the country, but there are no effective institutions to manage this money ", - she said.
Further, it follows from the words of the Chairman of the Accounts Chamber, that she is not a supporter of reducing the federal budget social expenditures. “If we do not deal with the quality of life of our citizens and do not support them at a certain level, then we’ll get a fundamental negative result.” We will be forced to invest even more than we invest now, because any rate, let's say, the death rate, birth rate, is determined by the quality of life and predetermined by that investment in human capital which is provided by us today ", - Tatiana Golikova said.
The delegation of the Accounts Chamber of the Russian Federation headed by auditor Tatiana Blinova visited Havana where participated in the 2nd International Seminar on Audit, Control and Inspection, arranged by the General Comptroller's Office of the Republic of Cuba.
The seminar was attended by over 140 people, including SAIs’ representatives of nine countries (Argentina, Venezuela, Dominican Republic, China, Cuba, Mexico, Russia, El Salvador and Ecuador), as well as the heads of most Cuban government institutions of central and regional levels.
The topical issues of state financial control, such as accountability and transparency, participation of civil society and its role in prevention and avoidance of financial misconducts, best practices in carrying out control activities of social and economic programs aimed at achieving the goals of sustainable development, were addressed at the meeting.
At the plenary meeting, Aleksandr Zhdankov, an auditor of the Accounts Chamber of the Russian Federation presented a report on “Experience in the Audit of Implementation of Bilateral International Treaties in the Field of Trade and Economic Cooperation, Including Establishment and Operation of Joint Ventures and Joint Projects Implemented by Russia with other Countries (Mongolia, Vietnam, Tajikistan, Cuba)”.
In the report the principles of joint control activities (by the example of audits of Rusvietpetro (with SAI of Vietnam), Sangtudinskaya Hydroelectric Power Plant-1 (with SAI of Tajikistan), Erdenet Enterprise (with SAI of Mongolia) and simultaneous audits (by the example of Russian-Cuban activities on financing deliveries of Russian construction and agricultural equipment, as well as in the field of civil aviation) conducted by the Accounts Chamber of the Russian Federation, were considered.
Tatyana Blinova, auditor of the Accounts Chamber of the Russian Federation reported on “The Role of the Accounts Chamber of the Russian Federation in improving the public governance efficiency”.
First of all, an emphasis in the report was made on the peculiarities of the audit for implementation of the government-sponsored programs of the Russian Federation, identification of options to improve the state audit and control over efficient use of funds of the federal budget as the means of improving the efficiency of public management. As integral elements of public management development, anti-corruption measures and regulatory framework improvement methods were considered.
Also, at the seminar, for the purpose of implementation of the provisions contained in the Cooperation Agreement between the Accounts Chamber of the Russian Federation and the General Comptroller's Office of the Republic of Cuba (2013), on June 2, 2016 the negotiations of the Russian delegation with Cuban SAI management on preparation to conduct Russian-Cuban audits in 2017 and 2018, were held.
In the course of bilateral consultations, the parties exchanged the information on the preparations for the simultaneous audit of the implementation of the projects on deliveries of Russian civil aircraft, accessories and services for the programs of the Cuban civil aviation modernization. As a result, the Parties reached an agreement to share the results of the work done in December 2016 and conduct simultaneous control activity in the field of civil aviation in the second half of 2017.
Discussion of the preparations for the simultaneous control activity in the field of construction of power units at Maximo Gomez and East Havana thermal power plants became a separate item of the agenda. The parties agreed to conduct the simultaneous audit on this subject in the second half of 2018.
At the end of the meeting, the parties confirmed their willingness to cooperate at all levels.
Chairwoman of the Accounts Chamber Tatyana Golikova spoke at the meeting of the Federation Council on the work of the Accounts Chamber in 2015.
Speaking about the implementation of the anti-crisis measures of the Russian government, Golikova drew attention to the efficiency of the development of the domestic commercial fish farming. The head of the controlling body said that the Russian Federal Fisheries Agency (Rosrybolovstvo) spent in 2015 only 56.6% of the funds provided for financial assistance to agricultural producers to support and promote efficient development of the domestic commercial fishery. According to her, the state programme “Development of the Fisheries Industry” provisioned 359.2 million rubles for these purposes; however, due to the underutilization of the funds provided the funding has been reduced by 30% through amendments to the budget. “The main reason of the inefficient use of these funds is the late preparation of the necessary regulatory documentation. Unfortunately, the relevant regulatory documents became available 7.5 months after the decision. As a result, the Government decided to provide subsidies to nine regions, but only five regions received this subsidy, because the remaining four were not able to properly interact with Rosrybolovstvo and fulfill all the conditions that were required under the agreement,” Golikova remarked.
The Chairwoman of the Accounts Chamber paid special attention to the problems of the regions in road construction. Golikova said that in 2015 the regions did not achieve the targets of the federal programme “Economic and Social Development of the Far East and the Baikal Region for the Period Ending in 2018”. For example, she said that the Zabaikalye Territory had commissioned only 10 km, while the plan had been 19.2 km. Under the sub-programme “Road Maintenance” of the state programme “The Transport System Development”, in 2015 the regions commissioned 2,709.4 km of roads of regional, inter-municipal, and local significance, i.e. 88% of the plan. “The following three regions showed the lowest indicators of the roads commissioned against the planned targets: St. Petersburg (plan - 70.2 km, fact - 0 km), the Republic of Karelia (plan - 28.2 km, fact - 0 km), the Kabardino-Balkarian Republic (plan - 50.9 km, fact - 0 km),” Tatiana Golikova remarked.
In conclusion of the report, the Chairwoman of the Accounts Chamber dwelled on the topic of balance of regional budgets. In her view, in many respects the situation with the exercise of powers in the regions is related to local organizational and administrative problems, and also to the long established problem of the budget imbalance and a high debt load. “I would like to say that in 2016 the prompt decision-making first by the tripartite commission on the improvement of inter-budgetary relations, and then by the Ministry of Finance, on provision at the beginning of 2016 of public budget loans, led to the reduction (as of May 1, 2016) of the regions’ public debt in comparison with January 1, 2016 by the amount of 26.8 billion rubles, or 1.15%, as well as to a change in its structure: the share of commercial loans decreased by 8.9 points and amounted to 32.7%, the share of public budget loans increased by 9.6 points to 44.1%. This is a very positive ratio, which we have not seen in a long time in the debt structure of the Russian Federation,” Golikova said. “Unfortunately, the work of individual ministries, as I have already noted, that administer targeted subsidies and other inter-budgetary transfers, is not so efficient and, unfortunately, this fact can affect the appearing positive trend, because the allocation of any subsidy leads to the need to find additional financial resources in the budgets of regions and, consequently, find sources of income or borrow from commercial banks or the federal budget,” she added.
Chairwoman of the Accounts Chamber Tatyana Golikova spoke at the plenary session of the State Duma on the work of the Accounts Chamber in 2015.
The Chairwoman of the Accounts Chamber briefly informed the deputies about basic indicators, characterizing the work of the controlling body in 2015. According to her, in 2015 the Accounts Chamber conducted 322 activities, which covered 2,594 entities. Based on the results of these activities, 516.5 billion rubles worth of violations were revealed. Tatyana Golikova emphasized that, thanks to the work of the Accounts Chamber, in 2015 10.3 billion rubles were returned to the federal budget and the budget of the Union State. Also, the head of the controlling body said that, based on the results of the audits, 44 materials were sent to the investigating authorities and security agencies and 74 materials -to the Prosecutor General’s Office; as a result, 44 criminal cases were initiated.
According to Golikova, during the control activity “Audit of the Implementation of the Federal Targeted Programme ‘Development of Water Management Complex of Russia in 2012-2020’, Aimed at Implementing the Objectives of the Water Strategy of Russia”, the facts of payment of outstanding work in the amount of 250 million rubles during the construction of the Krasnogorsk Hydroelectric Complex on the River Irtysh worth 8.6 billion rubles were established.Tatyana Golikova said that, as a result, the investigative agencies of the Investigative Committee of Russia had initiated criminal cases against officials of public institutions of the Omsk Region “Management of the Customer for Construction of Facilities of the Omsk Hydroelectric Complex”. “The mentioned materials of the control activity were used in the investigation of the criminal case against the former Minister of Transport Complex of the Omsk Region, whose actions caused the damage in the amount of 841 million rubles due to improper spending of budgetary funds,” the head of the controlling body said.
Tatyana Golikova, Chairwoman of the Accounts Chamber of the Russian Federation, gave an open lecture at the Financial University under the Government of Russia on the topic “Efficient Budget”1.
Tatyana Golikova in her speech touched upon the subject of the federal budget reserves in the difficult economic situation. Specifically, the Chairwoman noted that the shortfall of the federal budget revenues in 2016 with an oil price of $ 40 per barrel could reach 1.2-1.3 trillion rubles. “These funds are to be replaced by something, or we need to find some additional sources in order to finance these expenditures,” she said. The volume of the violations detected by the Accounts Chamber in 2015 is commensurate with 39-43% of the volume of the possible shortfall in the budget revenues.
Golikova said that the institution of state programmes of the Russian Federation, on the basis of which a significant part of the federal budget expenditures is formed, cannot be abandoned in the current economic climate, but it needs to be modernized. The Chairwoman told about the possible way to perform this modernization: it is necessary to select 5-10 state programmes most important for the economy, reduce the number of indicators under these programmes, make them reliable, link them to specific budgetary resources; the achievement of such indicators should be verifiable. She noted that it is necessary to monitor the implementation of these programmes and conduct their external audit; performance results should be considered at meetings of the Government of Russia and parliamentary hearings in the State Duma. “Both we and the Ministry of Finance believe that refinement of this type of mechanism in the present circumstances is to produce its result in terms of answering the question: which expenditures are effective today and which are not, which of them the State should support today and which it should not,” Golikova said.
Answering questions from the audience, the Chairwoman also said that the Russian Government’s attempts to influence the structure of the public debt of regions do not bring any significant results. Tatyana Golikova reminded that the regions’ public debt continues to grow and as of March 1, 2016, amounted to 2.4 trillion rubles, while the total amount of annual expenditures of the regions make 10 trillion rubles. “Today, we are carrying out checks on the management of the debt of the Russian Federation, and we see that the normative regulation, including that on the part of the Russian Federation, is not sufficient to make a difference in constituent entities,” she said.
On April 11, St. Petersburg hosted the second section of the bilateral Russian-Chinese seminar on the topic: “Performance Audit of Large-Scale Projects with Public Investments”
In the course of its work, Russian and Chinese experts had the opportunity to share their practical experience in conducting performance audit of large-scale projects, implemented in Russia and China.
Auditor of the Accounts Chamber of the Russian Federation Sergey Agaptsov told about the main powers of the Russian controlling institution to monitor large-scale projects with state participation, as well as about the practical application of performance audit by the Accounts Chamber in its control activities.
In particular, Agaptsov noted that the Accounts Chamber now has fairly broad powers of control over the use of the federal budget funds by organizations of any forms of incorporation, including the efficiency of the implementation of major projects with state participation.
“All instruments and state support mechanisms for large-scale projects are the most important area of control by the Accounts Chamber at all stages: preliminary (evaluation of the validity), operational (current) and follow-up (evaluation of the efficiency and effectiveness of the budget expenditures),” Agaptsov stated. At the same time, he emphasized that it is within the frameworks of follow-up control that the most detailed and substantive financial audit of major projects is conducted.
As the Auditor reported, in 2015 the Accounts Chamber of the Russian Federation began implementing a number of activities to monitor the expenditure of the means of the National Welfare Fund, assigned to finance infrastructure projects such as “Central Ring Road (Moscow Region)”, “Acquisition of Locomotives”, “Building Intelligent Networks”, “Modernization of the Railway Infrastructure of the Baikal-Amur and Trans-Siberian Railways”, “Construction of a Complex for the Extraction and Preparation of Gas, a Liquefied Natural Gas Plant and Facilities for Shipment of Liquefied Natural Gas and Gas Condensate of South Tambeyskoye Gas Condensate Field on the Yamal Peninsula”. “The total maximum volume of funds allocated from the Fund to finance these projects, in accordance with the instruction of the Government of the Russian Federation, is 661.3 billion rubles,” Agaptsov continued.
According to the Auditor, the final results of the audit of the implementation of these projects will be known in 2016 and 2017 after they are considered at meetings of the Collegium of the Accounts Chamber.
As for the use of performance audit in the context of large-scale projects with government investments, this type of audit is not sufficiently integrated in the Accounts Chamber’s control activities on auditing large-scale projects. This is largely due to the scale of this type of audit, which requires lengthy periods of time and detailed harmonization of issues of an activity. “In the current economic conditions,” Agaptsov said, “when a quick and rapid response to instructions of the President of the Russian Federation and the chambers of the Federal Assembly of the Russian Federation is required, a need arises mainly for a financial audit of specific issues. At the same time, the Accounts Chamber is focused on the questions of the efficiency and effectiveness of budget expenditures, but their consideration goes beyond the framework of classical performance audit.”
Zhang Tong, Deputy Head of the National Audit Office of the People’s Republic of China, noted that audit of government investments is an important duty of the National Audit Office of the People’s Republic of China, entrusted by the central government. Over the past two years, the powers in this area have been significantly expanded. The Central Government now attaches special importance to this area.
According to Zhang, audit is carried out at all stages of the project implementation and, first and foremost, the stages must comply with the national development strategy. “Evaluation of the project budget implementation at all stages makes it possible to timely identify inappropriate and inefficient use of funds, as well as the risks of corruption,” the head of the Chinese delegation said, emphasizing that auditors paid special attention to environmental protection.
He also noted that, thanks to the work of the National Audit Office of the People’s Republic of China, 2.8 trillion yuans had been saved for investment projects. “They found inefficient spending which was subsequently reduced in the budget. 210 persons were held criminally liable or subjected to a political disciplinary penalty,” Zhang reported.
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