Meeting with Senior Officials of the Accounts Chamber 2010-01-18 16:07:00 The Kremlin, Moscow President of Russia Dmitry Medvedev: Colleagues, First of all, I want to congratulate you on the anniversary you are celebrating now – the fifteenth anniversary of the Accounts Chamber’s founding. This was a landmark event in our country. In terms of recent history this already dates back quite a while, although in general terms it is still a very recent event. Over these years the Accounts Chamber has come a long way. Its main responsibilities have not changed of course, and are based directly on the Constitution, on articles 101, 102 and 103 of the Constitution, giving it responsibility for supervising the federal budget’s execution. Previously, our country had no such agency. There was a developed system of party supervision during the Soviet period, but there was no agency specially responsible for this work, charged with these specific tasks and established by the parliament. This explains the groundbreaking nature of the chamber’s founding 15 years ago. The Accounts Chamber has accomplished a lot over this time. Its work has helped to improve financial discipline in our country. According to my information, over these last 15 years, the Accounts Chamber’s work has resulted in almost 150 billion rubles [around $5 billion] being returned to the federal budget, and its checks over this period have brought to light violations totalling trillions of rubles. The Accounts Chamber works regularly with the law enforcement agencies and other bodies. Over this time, and especially over recent years, in my view, we have succeeded in establishing constructive and closely coordinated cooperation with the other supervisory agencies, above all the Presidential Control Directorate and the relevant departments in the Finance Ministry and the regions. This has all helped to make the treasury system responsible for the federal budget’s execution work more effectively in general, and the Accounts Chamber can take a lot of the credit for this. At the same time, there are clearly also problems that we have been less successful in resolving, and this means that there is still a lot of work ahead. We have a young political system, after all, and a young legal system. Even the Accounts Chamber’s work, though drawing its powers from the Constitution, is also in the process of improvement. Changes are made to the legislation on the chamber’s work, and also to individual aspects of the regulation system. You know well yourselves what work you still have ahead, in any event. There is a whole number of strategic tasks on the agenda today. I am referring above all to economic and technological modernisation, making our federal budget spending more efficient, managing state property, and of course, one of our ever-topical issues, namely, fighting corruption. As you know, we have passed a number of laws in this area recently. In terms of legal regulation the situation is now a lot better than it was say, five-seven years ago, but the problem remains just as acute and we have little to rejoice over, for corruption continues to be one of the greatest challenges confronting our country. In this context, supervision of the federal budget’s execution, improving the inter-budgetary system and relations, and control over the numerous expenditure items financed by federal budget money, including spending on anti-crisis measures, are all priority tasks. This was the case last year too, and you worked quite actively. This work will continue this year even though the general situation has improved somewhat. I hope that the Accounts Chamber will keep up with the times and take on board and make use of modern auditing methods and new technological solutions. Of course, I hope the chamber’s staff will also continue to develop their skills, because this is extremely important. We realise that without quality professionals and a sound human resources policy nothing will change for real. It is important to take this approach throughout the state sector and in the Accounts Chamber too. Another subject that has come in for a lot of attention is social spending. As you know, despite the crisis, we have made almost no cutbacks to social spending and continue to meet our social sector commitments in full. Furthermore, spending in some areas have even increased, taking into account the transformations underway in the pensions and social insurance systems. This make supervision of pension system funds and funding for healthcare and educational establishments one of the top priorities not just for the state in general but for the Accounts Chamber too, I think. There are some big projects, big construction sites that the whole country is watching closely, and of course everyone wants to know if the money is going where it should, being spent properly and effectively, and how the subcontracting work is being carried out. Everything related to these big projects needs to be kept under particularly close supervision. I am referring of course to the preparations for the APEC summit in Vladivostok in 2012, the 2014 Sochi Olympics, and the World Student Games in Kazan. Hundreds of billions of rubles have been earmarked for these projects and each rouble allocated has to be spent properly. I do not think I have opened your eyes to anything new here. These priorities are clear and obvious and you are well aware of them yourselves. Each of the chamber’s auditors has their particular set of goals and objectives. I hope that we can discuss this now. *** You know, the global financial crisis woke the world up to the fact that we need to take particular measures not just for domestic objectives but also to carry out supervision at international level, because as our recent experience shows, this is crucial not just for individual countries but for global economic prosperity, especially when we are talking about big countries and big economies. I bring this up because one of the proposals that the G20 came up with is to establish a reciprocal monitoring system that would give all interested countries the chance to independently observe and assess economic developments in other countries. I think this is very important so that we do not become hostages to poorly planned economic policies or speculative bubbles in other countries’ economies, absurd macroeconomic policies and so on. In this context, I think that the Accounts Chamber’s capabilities as a major state auditing body established by the parliament could be used at international level too. After all, who better placed than you to cooperate on these issues, to work together in these areas with other organisations? As I said, today’s situation makes this essential, and it is part of the global economy to be open for contact and at the same time to keep close watch on developments in other economies. To say a few words on one of the ideas raised today, namely, the question of nanotechnology and supervision of high-technology projects, projects in the IT sector and nanotechnology sector, I think this would be the right step, because we place great hopes on these projects as part of efforts to improve and reform our economy. To quote one particularly important figure, state companies’ investment programmes have earmarked 2.5 trillion rubles for investment purposes alone. This is quite simply an enormous figure: 2.5 trillion rubles. How this money is spent is a matter for separate analysis, but one thing I can say for sure is that a considerable amount of this money is being spent on investment. I think the figures are very small as far as innovation, economic modernisation and development of modern management systems are concerned. In this respect I even gave the big state companies’ CEOs the instruction to monitor this sort of spending. I think the Accounts Chamber could play a useful part too in this respect, because we are not indifferent to the way that the state companies spend the enormous funds they accumulate. On the question of establishing a clearer legal framework for cooperation between the Accounts Chamber and the control and audit chambers in the regions, and for better coordination of auditing work in general, I think it would make sense to set up a working group, perhaps under the Presidential Executive Office, in which Accounts Chamber staff, would take part, and perhaps some of the auditors too, and which would draft proposals on ways to improve the regulation in this area. Regarding invitations to major state events, I will ask the Presidential Executive Office to be attentive to requests from our colleagues from the Accounts Chamber.