Budget Spending Inefficient

VedomostiThe Audit Chamber says no funds were spent on an anti-alcohol program.

Budget spending has been inefficient and uneven in the first half of the year, including for some key national initiatives, according to figures released by the Audit Chamber on Friday.

Not a kopek was spent on some federal projects, including those fighting smoking and alcoholism, the chamber said in a statement. Funds to promote Russian policies, however, were spent in full for the first six months of 2009.

Of 9.7 trillion rubles ($307 billion) allocated for 2009 federal spending, just 3.9 trillion rubles, or around 40 percent, was spent in the first half, Finance Minister Alexei Kudrin said July 6.

Federal spending is typically higher in the second half because of inefficiency and corruption, analysts said.

None of the 62 billion rubles spent on the priority national projects this year went toward promoting healthy lifestyles or helping Russians with cancer and cancer-related illnesses.

President Dmitry Medvedev has stepped up his rhetoric in recent months in the fight against alcoholism, and he complained last month that there “have been no changes, nothing has helped.”

Only 18.7 percent of budget allocations for federal targeted programs were spent in the period, while five such programs — including the promotion of sports — spent no budget money.

The chamber said that of 130 top federal spenders, 16 did not execute their planned spending at all. Fifty-four spent less than the average, including the Federal Agency for the Procurement of Military and Special Equipment and the Federal Alcohol Market Regulatory Service. The procurement agency spent 0.1 percent of its budget, while the spirits market watchdog, created earlier this year, used 0.4 percent.

Questions e-mailed to the Finance Ministry on Friday went unanswered.

“We think the budget implementation should be gradual throughout the year, whereas most of the money is usually spent in December because of the sluggishness of some officials,” said a chamber official, who requested anonymity because she was not authorized to speak to the press.

Trust Bank chief economist Yevgeny Nadorshin said corruption also slowed spending. “Some officials may deliberately leave the main expenses until the end of the year, when spending is not closely scrutinized,” he said.

He also suggested that the financial crisis could add to the problem because some state bodies would limit spending to the most essential projects in fears that they would not get the additional funds allocated to them.  

Some state bodies, however, managed to spend all of their money allocated before July. State-run news agency RIA-Novosti, which was given 2.8 billion rubles this year to organize “the informational propaganda of Russia’s internal and external policies,” spent its money for the first six months in full, the Federal Treasury said last month.

The government took up the issue at a Presidium meeting Thursday. Kudrin said 5.6 trillion rubles, or around 57 percent of planned expenses, was spent January through August. Sums from 850 billion to 900 billion rubles will be spent monthly until December, when 1.5 trillion rubles will be spent.

“Inefficiency was named as one of the reasons for slow spending, while some state bodies spent less just because prices have gone down,” government spokesman Dmitry Peskov said.

Nadorshin said, however, the dropping prices were taken into account when a revised 2009 budget was adopted in April.