President of Russia Vladimir Putin: Good afternoon, Mr Artyukhin.
How are things? How is the work progressing?
Head of the Federal Treasury Roman Artyukhin: Thank you very much.
With your permission, I will report on the performance of the treasury system over the past year and on our current projects.
In general, the Treasury has four key responsibilities. In effect, we serve as a bank for the budgets and a single payments and settlements centre. All budgets, without exception, are serviced through the Treasury. Secondly, we act as ф centralised accounting office of the state. Thirdly, as per your instruction, we have been designated the Government’s state financial control authority, following the transfer of the powers of the Federal Service for Financial and Budgetary Supervision (Rosfinnadzor).
Naturally, all our functions are carried out through information systems. Two major platforms are the Electronic Budget system and the Unified Information System in the field of procurement, which is widely known. In addition, we have established…
Vladimir Putin: Does that include both state and municipal payments?
Roman Artyukhin: That’s right, all of them without exception. I will elaborate. A municipal reform is underway. This is a very large-scale task, which we are carrying out under the leadership of the Finance Ministry to ensure that all payments are processed smoothly and without interruption.
Such large-scale tasks cannot be accomplished without a strong team. We have built a highly professional workforce of 29,000 employees across the country. We service approximately one million legal entities through our treasury accounts and personal online accounts. This, of course, enables us to maintain steady and dynamic progress.
Clear cash planning forms the basis of our work, alongside continuous monitoring by the Government and the Finance Ministry. This allows us to process all payments without disruption. For example, the cash execution of the budget last year reached 99 percent.
Our strong performance is the result of two key factors: concerted cross-government effort and the deployment of digital solutions. A prime example, delivered at your request, is the implementation of digital completion certificates and digital contracts. So, what does this entail in practice? It means that all necessary documents, including completion certificates, are now signed electronically. Previously, standard business practice dictated payment within 30 days. Now, the moment a digital completion certificate is signed, funds flow directly and immediately into the economy. This is a direct outcome of our digital procurement system.
It may also come as a surprise to learn that the Treasury has become Russia’s third administrator of budget revenue. While the Tax and Customs Services are widely known in this role, the Treasury now stands alongside them.
The reason for this lies in a significant treasury system reform implemented in 2021: the creation of a single treasury account, which consolidates all liquidity from the entire Russian budget system – encompassing every region and municipality without exception. Crucially, we do not simply hold these resources; we actively manage them by placing funds in deposits and other financial instruments. We do so with a rigorous approach to financial risk, ensuring all placements are repaid on time. As a result, the Treasury generated 1.5 trillion rubles last year. Of this sum, 1.183 trillion rubles accrued directly to the federal budget, while a substantial 328 billion rubles provided a significant boost to our regions. This revenue, the 328 billion rubles I mentioned, derived from interest on their account balances, empowers regions to address their operational funding needs.
Beyond accruing interest, the Russian Treasury also provides treasury loans. The primary instruments are annual loans designed to cover cash flow gaps, offered at an annual rate of just 0.1 percent. To date, 38 regions have utilised these loans, and importantly, all have been repaid on time.
Furthermore, in line with your instructions, we have introduced two new financial instruments: special treasury loans and treasury infrastructure loans. While the Government makes the final decisions on allocations, the role of the Treasury is to formalise the agreements, provide robust treasury support, and most critically, ensure the targeted use of funds is monitored all the way through to the completion of each project. Currently, around 900 projects are being successfully implemented using these loans, which are granted for a 15-year term at a 3 percent rate.
We have quite a few objectives relating to the so-called digital treasury, as articulated by the federal Finance Ministry. These include promoting import substitution for information systems and ensuring the digital transition for small procurement contracts. In essence, this consists of switching budget payments to a 24-hour mode, just like in a bank where everyone is now used to being able to make payments at any time of day.
Speaking of treasury supervision tools, allow me to elaborate on some interesting projects we have in the accounting domain.
Vladimir Putin: Wait a minute, on the topic of treasury supervision. Not always, but quite often economic operators and some of our state-owned companies resist this treasury supervision. They claim that this creates complications, additional administrative hurdles and obstacles, taking more time to process corresponding decisions.
Roman Artyukhin: Indeed, on behalf of the treasury we believe that we need this tool right now. Why? Because of the large volume of allocations which are disbursed as advance payments. In fact, what is the gist of this treasury supervision? It covers the advance payments which used to be transferred to settlement accounts. But an advance payment is essentially a loan. Accordingly, we need to make sure that it is used in keeping with its stated purpose. Therefore, it is true that as soon as we get these advance payments on our bankbooks, we instantly request contracts and work completion certificates along the entire cooperation chain. All these transactions leave an auditable trace. In a way, this can be described as complying with financial and budget hygiene rules when engaging funds. But as soon as the product is delivered, the funds are released and are transferred to settlement accounts. For this reason, we need this tool right now in order to be able to trace all the funds and ensure their targeted use in keeping with the Budget Code and financial law.
Of course, this may cause some inconveniences since companies used to be able to treat these funds as part of their working capital. They received them on their settlement accounts and could reallocate them to other projects or even use them to earn revenue. But now it is the Treasury which earns this revenue since all these funds are deposited on the single treasury account.
Vladimir Putin: Could you say a few words about the digital ruble?
Roman Artyukhin: The digital ruble is a very interesting project. Last year, following your instruction, we conducted a pilot. I am pleased to report that, as of January 1 this year, we are ready to accept payments into the budgets of the budgetary system. The first payment – an administrative fine – was made by an individual in digital rubles. The year has only just begun, and already the first 1,500 rubles in digital currency have been received.
There is, naturally, significant work ahead to explain things. Currently, together with the Central Bank and the Finance Ministry, we are identifying interesting priority areas for expenditure that could be transferred to the digital ruble platform.
There are interesting proposals regarding types of subsidies and specific infrastructure projects. We are now discussing all this with Finance Minister Anton Siluanov, and these results may even help to balance, to some extent, the issue of treasury supervision and banking services.
If I may, a brief word about accounting. As the accounting authority, we are preparing a report on budget execution, the Russian Federation balance sheet, which is subsequently audited by the Accounts Chamber.
Vladimir Putin: Are you also transitioning to a digital format?
Roman Artyukhin: Exactly.
One of our projects is essentially 24/7 collection of reporting from the main ledgers of all our autonomous budgetary institutions, ensuring the balance sheet of the Russian Federation is updated on a regular basis. This includes our assets, liabilities, public debt, accounts receivable, and accounts payable. Obviously, thanks to this system, we must, under the guidance of the Finance Ministry, clearly see the financial condition, position, certain risks, and, accordingly, ensure the reliability and transparency of all financial reporting.
Regarding our control activities. Ten years ago, by your decision, the Treasury became the body for internal state financial control. This is a challenging task. Naturally, we were guided by the principles of control and oversight operations and the reforms being carried out across the Government as a whole.
Undoubtedly, this is a risk-oriented approach. We have reduced the number of inspections fourfold, while placing emphasis on preventive forms of control. For instance, last year – and this is a reliable figure – 190 billion rubles represented a reduction in funding requirements.
Requests come from the Finance Ministry, and our two agencies cooperate to conduct expert and analytical surveys to identify more efficient mechanisms and forms for providing these resources. Additionally, as a result of control measures last year, 56.7 billion rubles were returned to the budget through payment orders. These are the resources we identified as having been provided in violation of their terms and conditions.
Vladimir Putin: Losses are being reduced, correct?
Roman Artyukhin: Precisely.
We maintain close cooperation with the Presidential Control Directorate. Last year, we monitored the implementation of 16 of your instructions and will continue systematic work on 13 of them. We regularly report to the Control Directorate, consolidate our findings, and jointly formulate proposals to ensure that responsible officials effectively carry out their assigned tasks.
State defence order remains one of our key responsibilities. In accordance with your instructions, amendments to the law on state defence order have come into force. Beginning this year, we have launched automated monitoring of the use of defence procurement funds. We are working in close coordination with the Defence Ministry, the Federal Service for Financial Monitoring, the Federal Taxation Service, and the Federal Anti-Monopoly Service.
What is our task?
Vladimir Putin: Above all, the goal is to reduce the risks of price inflation.
Roman Artyukhin: Exactly. We have reviewed all contracts, analysed outstanding receivables, and assessed performance risks throughout the cooperation chain. Together with the designated supporting bank, we have developed a monitoring model that enables us to work proactively with the Federal Service for Financial Monitoring and the Federal Anti-Monopoly Service. Through this mechanism, we notify contractors engaged in state defence orders about the risks we identify.
Vladimir Putin: Do you personally observe tangible results from these measures?
Roman Artyukhin: Yes. I am prepared to present a separate report on the results, including details at the level of individual companies.
Extensive and systematic work is underway within the Security Council, and we are actively participating in these efforts. At present, the Defence Ministry is modernising its pricing methodology, transitioning from capped pricing to an indicative pricing model. Our audit findings have helped identify existing reserves within these mechanisms, and they are indeed significant.
Vladimir Putin: Unfortunately, we have not yet fully phased out the capped pricing system. I ask you to maintain close oversight of this process.
If you believe that additional measures are necessary to improve the effectiveness and precision of this work, please raise the issue and submit your proposals.
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