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President of Russia Vladimir Putin: Mr Stepashin, we meet regularly to look at what the Accounts Chamber is doing and see what steps the executive authorities have to take to fix the problems that your audits reveal.

What particular matters do you propose discussing today?

Accounts Chamber Chairman Sergei Stepashin: Mr President, I want to report on the results of the audits we carried out last year of some of the main projects that considerable budget funds have been put into.

They include the Winter Olympics in Sochi. We conduct quarterly monitoring of this project. You know that we are working together with Dmitry Kozak [deputy prime minister overseeing organisation of the 2014 Sochi Olympics] and do not divide the responsibility.

Your recent remarks in Sochi, including on construction of the ski jump and so on were based on the results of our audits.

We audited the APEC project too. I know that Igor Shuvalov [deputy prime minister responsible for organising the APEC summit in Vladivostok] has already briefed you on this matter, and I can confirm that we criticised them quite harshly at the end of last year, not because they failed to build what was planned, but because two thirds of the facilities were not ready on time.

Vladimir Putin: They hadn’t been handed over yet.

Sergei Stepashin: Yes, that was indeed the case, and that meant that the students could not begin using the facilities as planned. As at February 1, 2013, we now have 90 percent of the sites on Russky Island ready for use. They have an excellent university there now, as you know well, and classes will start there as from September 1. I think that the executive authorities responded quite well in this case.

Last year was a success in terms of our cooperation with the law enforcement authorities. The biggest cases in the public eye were the Oboronservis and GLONASS cases, and the situation with forests, including in Leningrad and Moscow regions. We supplied documents on these cases to the prosecutor’s office, and for the first time in several years now did not get a single refusal. We submitted documents on 176 cases and criminal cases were initiated in practically every instance, including the criminal case opened a few days ago into the affair at Skolkovo.

One of the priorities for our work plan this year is to monitor implementation of the presidential executive orders you issued in May 2012.

Together with the Finance Ministry, we drafted a programme of cooperating with the Federal Service for Financial and Budget Supervision. The amount of money involved is considerable, 2.6 trillion rubles in total [more than $86 billion], much of which the regional budgets need to raise. We are working now with the monitoring bodies to ensure that the regional budgets fulfil your executive orders’ provisions in planning their revenue and spending.

Frankly speaking, many seem to have decided, unfortunately, that since they are obliged to carry out these presidential executive orders, they will simply do so using federal budget money for the most part. But as you know, the federal budget cannot cope with such a burden, all the more so now that quite substantial powers have been transferred to the regions. We will keep tight oversight over this whole situation.

Another issue, one that you raised during the meeting in Sochi, is that of the housing and utilities sector. There are two issues in particular here: dilapidated housing stock and complete overhaul of buildings. I reported last year that the Housing and Utilities Reform Facilitation Fund is working quite well, and the infringements revealed (involving around 25 billion rubles) mostly concern the regional authorities. Incidentally, the regional authorities are also reacting quite fast to this situation.

Vladimir Putin: These are infringements concerning co-financing obligations?

Sergei Stepashin: Yes, there is the problem of shortfalls in co-financing, and also, unfortunately, there are quite simply opportunists trying to get their cut. In three regions that we audited several people were fired and eight criminal cases were instigated. We worked together with the General Prosecutor’s Office.

There is another issue that I will report on in writing: the Housing and Utilities Reform Facilitation Fund’s co-financing procedures have changed. It used to be a fifty-fifty scheme, depending on budgets’ possibilities, but now the regional budgets will shoulder the main burden – 70 percent. Our analysis suggests that half of the regions will not be up to this task. I think we therefore are to take another look at this matter and calculate things very carefully, because this is a very important programme. This is probably the first time in 30–40 years that we have really started addressing all of the problems that have built up in this area.

Complete overhaul of buildings will concern around 17 million people. 300,000 families have already received new homes. We know from our own experience what the communal apartments in St Petersburg are like, and so I ask that we take another look at this matter, Mr President.

Vladimir Putin: Alright. Dilapidated housing stock and communal apartments are not quite one and the same issue. In St Petersburg, say, this is a whole big separate problem. We will work out with the Government how to help St Petersburg in this area. But the programmes we are dealing with now specifically address the problem of dilapidated housing.

Sergei Stepashin: Yes, and then there is the other programme for complete overhaul of housing stock. This also comes under the Housing and Utilities Reform Facilitation Fund. This programme does concern St Petersburg, especially the old housing stock in the city.

Vladimir Putin: That’s true. Let’s look at this in more detail.

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