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Meeting with Accounts Chamber Head Alexei Kudrin

August 19, 2020, Novo-Ogaryovo, Moscow Region

Vladimir Putin met with Chairman of the Accounts Chamber of the Russian Federation Alexei Kudrin.

President of Russia Vladimir Putin: Mr Kudrin, I know that you have several questions, and all of them are important.

In recent months, we have mainly focused on healthcare issues, infection control and the like. But people are obviously concerned about the matters you want to discuss; they are no less important, and we must not lose sight of them.

I know that, among other things, you would like to start with how government money is spent on measures that are part of municipal solid waste management reform. Let us begin with this.

As far as I know, you also wanted to talk about unfinished construction projects and the development of the Far East.

Go ahead, please.

Alexei Kudrin, Chairman of the Accounts Chamber: Thank you, Mr President.

The Accounts Chamber, like everyone else, has to operate under conditions of a pandemic. We certainly wanted to reduce the burden on ministries and departments that come from our inspections. For one month, we completely discontinued our audits; new audits were pushed back two months, so we only completed the old ones.

We agreed with the State Duma that we would complete our inspections on the Government report and last year’s federal budget a month later. Now all the reports are ready; 93 top federal fund managers have been audited, primarily federal ministries and government agencies.

I will say upfront that we have performed a total of 169 audits. Half of them are budget-related. We uncovered 20 violations that require a legal review by the General Prosecutor's Office and the Investigative Committee; the documentation has been sent to them. The Accounts Chamber forwarded 131 notices on violations by ministries and agencies. The violations, misuse of funds, improper accounting, incorrect representation of sites and expenses in financial statements, and violations of public procurement procedures all add up to about 50 billion rubles.

All of that has been documented, submitted to the relevant authorities (ministries and agencies, as a rule, immediately correct and amend their documentation); in some cases, the violations entailed an administrative penalty and suspension from office.

We are certainly responding to the pandemic as well. At the request of the State Duma and the Federation Council, we planned several audits or reviews this year, on the estimates and analysis of material aid for the doctors who work with infected patients.

We have been reviewing the purchases of artificial lung ventilators, non-contact thermometers and other equipment. Large funding has been allocated to support the economy. Generally, this was done quickly based on very simple procedures. We will, likely by the end of the year, analyse how this funding has been used and whether the proper procedures were used. Therefore, in this respect we are working with healthcare and in economic support.

As you know, in the first half of the year we reviewed gas distribution to the public. This was a planned review.

We looked at Gazprom Mezhregiongaz. I must admit that there has been a serious delay in implementing our earlier plans. For example, of 21,000… In the past three years only about 15 percent of the plan has been carried out.

Vladimir Putin: Is this Gazprom’s plan or is this also related to the regions?

Alexei Kudrin: Some gas distribution expansion is carried out by Gazprom Mezhregiongaz and some by local municipalities, mainly gas lines to the villages.

Vladimir Putin: Extension to the final consumers.

Alexei Kudrin: The plan for funding these measures has been reduced considerably because in general gas supplies are now lossmaking since the cost of the system is often higher than the rates. Usually, Gazprom compensates for this loss with export revenues, but now this revenue is in decline. This is why there is a new risk of delay.

But for the most part, the violations and shortcomings are due to the lack of coordination between the company and the regions. Their plans are not always coordinated. Often a gas line between a village and the gas main is laid but, say, the regional or municipal systems are not ready for it. Thorough coordination is a must in this respect. As a result, we agreed with the Energy Ministry and the company on a new procedure and measures that must be implemented for these projects.

The accumulated consumer debt to the company is 331 billion for gas consumed. Cases of non-contracted gas consumption have been identified in the North Caucasus. The decisions previously made in this regard have not yet been implemented for various reasons, we addressing them now. But today I would like to ask you to sign a number of instructions in this regard.

Vladimir Putin: All right.

Alexei Kudrin: We are certainly addressing the solid household waste issue. We have performed several inspections. But everything mainly stumbles over financing and technology. Unfortunately, not all landfills within city limits, including some unauthorised ones, are being eliminated. So we have outlined an action plan, decided which landfills still require attention, and we sent a corresponding supplement to our report to the regions and, respectively, to the Ministry of Natural Resources and Environment. Therefore, I hope that the appropriate decisions will be made.

We have also reviewed matters of social security of socially vulnerable groups, and looked at the programme to provide housing to people with disabilities. Unfortunately, only 3 percent of the waiting list has been satisfied with new housing, which they got last year, and the year before last, 6 percent. So far, the pace is insufficient to meet legal requirements and fulfill the social obligations of the Russian Federation.

Another priority is forest resources. We audited the implementation of regulations on the protection and accounting of natural resources – 85 percent of the forests have not been evaluated in terms of current conditions. This runs contrary to the current regulations and, accordingly, decisions on additional evaluations and registrations will be made. In autumn, we will also review the firefighting equipment used for forest protection. We have seen a lot of wildfires lately. However, not all regions appear ready to stand up to such challenges.

Another major review and analysis project is to prepare a report on the openness of the state. Actually, there are a number of laws…

Vladimir Putin: Do you mean openness of government agencies?

Alexei Kudrin: Yes, government agencies. We called this report “Open State.” We looked at compliance with existing laws on responding to people’s petitions and on liaising with the media; compliance with rules and regulations previously approved by the Government for maintaining websites, publication of open data, publication of statistics by ministries and agencies, that is, compliance with previously adopted state legal acts.

I must admit that this is an inconsistent picture. Some ministries successfully and openly work with the public, responding to their questions, cooperating with the media, publishing information to assess the performance of the authorities or the events and trends that are taking place in these regions. This is important, especially in today’s conditions when information becomes the subject of analysis and business, and data becomes the foundation for making managerial decisions, forecasts and plans.

Today we are identifying many shortcomings, rating the ministries and departments based on these criteria and drafting methodologies. Only one third of government agencies respond to journalist inquiries in a timely manner. Less than half of the ministries and agencies provide timely response to public inquiries in accordance with existing legislation. Needless to say, this reduces trust in the state. The majority of public councils are not sufficiently open. In other words, every ministry and department has public councils but they do not necessarily publish information, including on the implementation of adopted decisions.

At the first stage we audited certain ministries and agencies, primarily those in the power department, law enforcement and security forces, only in some aspects, even though these rules and standards apply to them as well. I can say that the Federal Service of Court Bailiffs, the Ministry of the Interior and the Ministry of Justice are fairly open. They follow the general procedures, and usually do a good job, better than the others do.

The Ministry of Culture, the Ministry of Energy and the Federal Tax Service are also working well with open data. They know how to work with big data, how to involve people, and are creating new applications to use the services of these ministries and agencies.

We will continue with this. I think we have upgraded this effort in the Audit Chamber… It is very important for us to present this information to people to allow them to evaluate the performance and progress in reaching the indicators of national projects, as well as the goals of our strategy and government programmes. And we will continue this effort in this area.

Another area of attention and analysis is state information systems. Actually, in recent years, we have spent a lot of money on developing information systems at various levels. We have counted as many as 876 systems. There were more, but some were officially closed. Even though government money has been invested and those systems have gone online, they were later shut down, or became irrelevant, or the input of data into those systems was discontinued. These 876 systems have remained operational, but the quality varies greatly. In some, data is not updated, or is incomparable with other data from the same industry or sector.

We selected 50 ministries and agencies and tried to analyze what hinders their work and what needs to be done to help. The best state information systems include those used by the Federal Tax Service, the Ministry of Finance, the Ministry of Culture and some others. We have ranked all the state information systems. After we published the results, the ministries became more active, become interested in their systems and their quality. My belief is that it is imperative to improve the quality of state information systems now because the data provides the basis for management decisions, and improves openness to the public.

We are continuously monitoring the progress of unfinished construction projects. As for your instruction on the inventory of such projects, unfortunately, there is a big delay. We are now restarting this work with the new Government. With each project, we need to decide what should be done: complete the construction, or sell off the unfinished project, or write it off because in some cases the facilities have lost most of their value and there is no reason to complete them, so as a rule, they are either sold or are simply deducted from the balance. But the problem is that too many projects of this kind have accumulated in recent years, while the ministries were afraid to write them off. What is being done now is an inventory, and plans are being made for these unfinished projects.

Vladimir Putin: Good.

I know that you also wanted to report on so-called unfunded mandates; so now let us discuss this topic.

Alexei Kudrin: Thank you.


August 19, 2020, Novo-Ogaryovo, Moscow Region