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. Last Updated: 07/27/2016

State Audit Chamber Asks for More Power

Last year the Audit Chamber discovered that 63 billion rubles (currently $2.2 billion) of federal budget and state non-budget funds were missing as a result of actions by unscrupulous officials, but the chamber could only secure the return of a paltry 4.2 billion rubles.

The reason?

It has no power to enforce the law.

Audit Chamber officials would like to change that, but the government doesn't seem to like the idea.

"After conducting an audit, we give our opinion and according to the law, it must be enforced," said the chamber's Mikhail Beskhmelnitsin. "But no one is held responsible for the failure to enforce it,"

The State Duma is considering making amendments to the law on the Audit Chamber, in accordance with which a fine could be imposed of up to 100 minimum salary payments (around $400) for violations. These amendments would give auditors the right to study cases of administrative violations of the law and impose administrative punishments.

The chamber should also have the right to transfer funds from the accounts of enterprises if no other measures are effective, said Beskhmelnitsin.

"Of course, it is necessary to clearly spell out the rights of the entity being audited. The entity should have the right to contest our decision through the court. Not one of the auditors in the chamber can deny the right to appeal," said Beskhmelnitsin.

Ivan Dakhov, another chamber official, said the Audit Chamber could return larger sums of money to the budget if it became an organ of financial control. But auditors will find it difficult to broaden their powers. The government has come out against the idea and has already reacted negatively to the amendments that would give the chamber wider power.

Several independent experts on the chamber question whether the broadening of auditors' powers will automatically lead to the replenishment of the budget.

"It would be great if it was possible to retrieve the 63 billion rubles, about which the Audit Chamber has spoken. But it cannot be established that the money exists," said Vasily Boiko, the general director of the watchdog group Vash Finansovy Popechiltel (your financial guardian).

"For example, the tax debt of enterprises now exceeds the money supply by two times. The broadening of an agency's powers will not help. Such money just does not exist in Russia," Boiko said.

According to the auditors themselves, nowhere near all of the 63 billion rubles were stolen. "The concept of using budget funds in a manner contrary to their intended purposes is not clearly explained in the Budget Code," said Beskhmelnitsin.

"If some agency spends money that was earmarked for construction on wage payments or on a banquet in a foreign country, in both cases, budget funds were used in a manner contrary to their intended purposes. But in reality, it's not one and the same thing. If we differentiate between these concepts, it will be possible to take more stringent actions against real violations," he said.

In accordance with federal law, the Audit Chamber currently has the authority to carry out the following functions:

  • It can organize and conduct operative monitoring of the carrying out of the federal budget;

  • Conduct comprehensive revisions and thematic audits of separate divisions and articles of the federal budget and the budgets of federal non-budget funds;

  • Investigate projects of the federal budget, laws and other legal decrees, international agreements of the Russian Federation and federal programs;

  • Monitor the management and servicing of the state's internal and foreign debt;

  • Monitor the lawfulness, rationality and effectiveness of the use of foreign credits and loans received by the government from foreign governments and financial organizations;

  • Monitor the effectiveness of the extension of centralized financial resources in the form of loans;

  • Monitor the extension of state credits and the extension of credits in the form of grants to foreign governments and international organizations;

  • Monitor the income of the federal budget from the disposal and management of property and income of the federal budget received from privatization and the management of objects of federal property;

  • Monitor the activities of the Central Bank.