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President of Russia Vladimir Putin: Good afternoon, Ms Golikova. Let us discuss the results. Please, go ahead.

Accounts Chamber Chairperson Tatyana Golikova: We are slowly moving toward the end of the year and, of course, are tallying results.

Eleven months have passed and, of course, both in quantitative terms and in figures, the result of our activities indicates that, unfortunately, the number of violations is growing at this stage. While last year there were 3,855 violations totalling 965 billion rubles, this year there have been 3,980 totalling 1.556 trillion rubles for the past 11 months. But perhaps we should not be afraid of this figure, because many things have changed structurally.

First, we began to put our work at the federal level under preliminary control. And such preliminary control allows us subsequently to avoid serious financial irregularities, serious financial consequences. Of this amount, approximately two-thirds are violations that could have led to financial irregularities, and one-third is financial irregularities.

An indirect sign of how financial irregularities are structured is our current work to initiate administrative cases; we have such powers, when we find violations during inspections. In 2017, the court adopted decisions on 243 administrative cases and imposed fines. If we compare 11 months of this year with last year, then it is about 7.5 percent higher. The structure is approximately the following: violations of budget legislation in the form of state assignments for federal institutions, these are violations of the procedures for granting subsidies, inter-budgetary transfers in Russian regions, and so on.

In this sense, I would like to say that we are functioning more or less well at the federal level and working closely with the ministries and departments. However, at lower levels – the second, the third, and the fourth – the administrative work still leaves much to be desired. Unfortunately, today the multi-tiered nature of public administration gives rise to a large number of financial shortcomings and irregularities.

For me, this came as a surprise. We carried out some studies (I have already mentioned some of its findings). Now, I can say that the number of publicly funded institutions in the executive bodies that report to the Government, not the President, that is, the classical executive power, grew by 24.5 percent over the past five years during the period from 2012 to January 1, 2017. We have 3,066 of them now. However, the worst part is that the number of branches of government agencies has doubled over the same time to a total of 4,829. They are multiplying, whereas regulations governing their spread are nowhere to be seen. This gives rise to very serious problems related to managing the use of financial resources.

However, since you identified the regional budget balances as a priority, we partially focused our 2017 audits on how effectively the regions are using their funds and the funds that are made available to them in the form of subsidies or inter-budgetary transfers.

I must say that, unfortunately, we have identified major shortcomings in a number of projects on the part of regional authorities. I even brought some photographs with me. This is a tourist and recreational area inspection we did on your instruction, to check on the way financial resources are being spent.

For example, in the Lipetsk Region, Yelets tourist and recreational area spent 18.2 million rubles of budgetary funds, approximately half of it from the federal budget. An overpass that they built there leads nowhere. A shopping centre was supposed to be built there. There is no shopping centre. Accordingly, the money was not stolen, but was used ineffectively.

Vladimir Putin: There is an overpass, but there is nowhere to go.

Tatyana Golikova: A similar problem has been reported in the Tunka Valley in Buryatia. A water collection and supply system has been built there. It cost 172 million rubles, including 162 million rubles allocated from the federal budget. And when everything was finished, the system remained unused for two years because of the absence of permits.

The same is true of Yakutia, where money was invested in gas supply networks and other projects, which have not been launched yet. Regrettably, there are many such examples.

When you issued instructions to monitor the use of funds for emergency relief measures, we also looked at the organisation of regional efforts to prevent emergencies. Here are the results of the latest inspection we conducted in Khabarovsk Territory. Between 2014 and 2016, design specifications and estimates were prepared for 10 hydro projects there to prevent emergencies. It cost 262.5 million rubles, but these projects have not been included in any of the regional programmes and hence have remained on paper, that is, they have not been implemented. Therefore, we will most probably have to deal with the consequences of floods in these areas. The same goes for fires.

I began our conversation today by saying that our efforts are focused on prevention. In terms of money, many allocations can be avoided if we focus on prevention and preventive measures. In this context, we should shift our focus towards restructuring our spending priorities, especially in the socially relevant areas that are hit by fires, floods or any other related disasters.

This is why we are working with the Government in these areas. Of course, since our functions are more closely related to the Finance Ministry, we have been working, although not as rapidly as we would like, to improve the legal regulation of the areas where we need to bridge gaps. I strongly hope that we will be able to reduce the amount of funds spent in violation of legislation with every passing year.

Vladimir Putin: Good. Let us talk about this in more detail.

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