Accounts Chamber Chairperson Tatyana Golikova: Mr President, we are currently summarising our performance results for 2016. But I believe it is particularly important that we have started a new fiscal year. And while informing you of the last year’s results, I hope that the mistakes that were made will not happen again or happen less frequently in 2017.
Over 2016, we carried out 320 supervisory checks, analytical and expert reviews within our competence, which extended to 2,165 facilities. We are conducting another 20 checks regularly to ensure adherence to the federal budget, the budgets of state non-budgetary funds and regional budgets that receive funding from the federal government.
According to our preliminary data, we have revealed 3,825 violations of law at various levels, which is similar to the 2015 statistics. This means there was no increase in violations – or, to be more precise, there was a slight decline. These violations can be classified as follows (there are certain important aspect that must be taken into account): 899 violations in state procurement and excessive budgetary allocations for procurement contracts.
All the violations in state procurement have been seen before. These include violations during execution, delivery of services, works or equipment different from those specified in contracts, extensions of contractual terms which were sometimes unsubstantiated.
These issues could be addressed by establishing an integrated system that would comprise the budget, the state procurement registry and fiscal support of the entire process. This is very important right now. Both the Finance Ministry and the Federal Treasury have quite significant powers. What is required is to build this integrated system. My colleagues and I are working on this project.
The second group of violations concerns how public property is used and how corresponding tax and non-tax payments are calculated. For example, we had an inspection campaign. At issue was temporary imports of vehicles into Russia.
Vladimir Putin: Is that similar to public procurement?
Tatyana Golikova: No, it’s more to do with computing revenue – temporary imports. The inspection revealed that a fairly large number of vehicles were not taken out of Russia in a timely manner.
Vladimir Putin: They got stuck here?
Tatyana Golikova: Yes, 22,600 vehicles. Since they didn’t make it into the reporting…
Vladimir Putin: The state received less money.
Tatyana Golikova: Correct, taxes were improperly assessed. With regard to state property, I think, there will be quite a lot of work to do, because, broadly speaking, there will be violations of two types. The first involves investment contracts dealing with land under relevant agencies, which is usually the subject of an investment contract.
We have checked 46 investment contracts and, unfortunately, uncovered 86 violations. The estimated damage under 13 contracts alone amounts to 7.5–13 billion rubles. That’s an estimate, but, as a rule, investors do not fulfil their obligations under the contracts. Housing construction is underway, flats are being made available to owners, but the terms and conditions of state contracts are not being complied with.
Vladimir Putin: Prices and volumes are out of sync with the market.
Tatyana Golikova: Correct. With respect to taking an inventory of state-owned property, unfortunately, there are major discrepancies: there are 76,000 facilities on the state books overseen by the Federal Agency for State Property Management (Rosimushchestvo), whereas the Federal Service for State Registration, Cadastre and Cartography (Rosreestr) shows three times more, which translates into underpaid taxes. We will not achieve anything until things are put in order in this department.
Another topic that I would like to focus on appears technical. It’s about the inaccurate representation of economic information in budgetary reporting. This also results in tax evasion. Newly opened facilities or newly purchased equipment are not delivered on time and, therefore, are not subject to taxation, because they are not in the reporting. In administrative terms, budget reporting is subject to approval at the legislative level.
A review of the budget execution for 2015 – we did not have yearend performance results for 2016 at this point – has revealed 14 instances of unreliable budgetary reporting. We worked closely with the Finance Ministry and the Treasury on this issue and managed to fix many shortcomings. The most important thing is that the issue did not concern top officials, but second- and third-tier ones. Unfortunately, many shortcomings we have revealed are the result of unprofessional conduct by government officials.
The most recent shortcoming we have revealed concerns the implementation of the Federal Targeted Investment Programme. It is regrettable that in some cases budget funds were allocated before the submission of design specifications and estimates or the allocation of land plots. The money that is transferred from the budget in such cases is misappropriated through placement in deposit accounts or used contrary to the intended purpose.
We are working closely with the Government, the Parliament and law enforcement agencies. Our work with the Government is mostly focused on problems connected with gaps in the current legislation and efforts to fill these gaps. For the past three years since I was appointed to this position, we have moved forward on amending the legislation and introducing regulatory changes.
We only forward documents to law enforcement agencies when we uncover cases subject to legal prosecution, so that these agencies hold the required inspections.
Regarding the year 2017, we will focus, as usual, on the implementation of your and parliamentary instructions and will conduct preliminary, ongoing and follow-up monitoring of the execution of all budgets of the budget system.
One of the new elements in 2017 is our ability to monitor and oversee the implementation of priority national projects and compliance with their targets, when and if necessary, as well as update the council, which you chair, on our priority projects.
Vladimir Putin: Ms Golikova, in order to finally settle these issues, please put everything you have or have not said here on paper in a concise form, including everything you need from your documents, the solutions you propose, the areas in which this should be done and the partners with whom you will be doing this.
Tatyana Golikova: Yes, certainly, we’ll do this.