No. 7 (67)/2003

SUMMARY

Vladislav Ignatov
(p. 3)

Report on the results of auditing efficiency and expediency of managing OAO "AK "Transneft" block of shares held in the federal ownership and ensuring receipt of dividends by the federal budget as well as efficiency and expediency of the institution and management of OAO "AK "Transneft" subsidiaries.

The purpose of the audit is to assess efficiency of managing OAO "AK "Transneft" block of shares held in the federal ownership for the purpose of developing fuel and energy sector of Russia, improving financial and economic indicators and developing the company with regard to the set measures of state regulation.

Objects of audit: RF Ministry of Property Relations, RF Ministry of Power Engineering, OAO "AK "Transneft".

On the whole, the results of the audit showed that the decision about privatization of pipeline transport was made within the framework of the RF President's extraordinary authority on carrying out the economic reform but contrary to the statutory prohibition of privatization in this sphere.

OAO "AK "Transneft" is a natural monopoly in the sphere of pipeline transportation which defines its strategic position in ensuring Russia's interests and security in the sphere of economy.

Alexander Kushnar
(p. 30)

Report on the results of auditing disbursement of federal budget funds and material assets, timely receipt and transfer to the federal budget of monetary funds obtained from disposal and management of federal property in 2001 and the passed period of 2002 by the Moscow Prosecutor's Office.

Purpose of the audit: to determine legitimacy and justification of disbursing budget funds and material assets by the Moscow Prosecutor's Office.

The audit detected the facts of budget funds having been disbursed for other than projected purposes without the follow-up official investigation by the RF General Prosecutor's Office. The limit of the service cars was exceeded and a larger number of cars was used during weekends and holidays than that provided for business trips.

The Moscow Prosecutor's Office owe 28479.5 to the Moscow Department of Finance for the apartments that the Moscow government allocated to the prosecution authorities in 1999-2001. This debt was not recognized as payables in the Moscow Prosecutor's Office books.

Vladimir Panskov
(p. 49)

Report on the results of auditing how justified the provision of customs privileges was and how the definition was made of the volume of customs payments that did not come to the federal budget due to the fact that the goods were imported as international humanitarian aid (medications and medical equipment, foodstuffs including baby foods, second hand clothes and shoes) in the customs houses that processed humanitarian aid to enterprises and organizations located in the North-Western Federal Area for 2002 and the passed period of 2003.

Subject of the audit: legal documents and instructions on the basis of which the goods are handled as international humanitarian aid. Volume of customs payments that did not come to the federal budget due to illegal provision of privileges for importation of international humanitarian aid.

The audit detected that as a result of applying "simplified procedures" for recognizing goods as humanitarian aid the sum of unjustified privileges for customs payments amounted to 117.7 ml rubles. The improper use of the International Humanitarian Aid Commission certificates by officials of the Saint-Petersburg customs under the RF Government resulted in the illegal provision of the privilege which did damage to the federal budget in the amount of 0.4 ml rubles. In violation of the established procedures providing for obligatory check of the International Humanitarian Commission the Baltic customs illegally provided privileges for customs payments to the federal budget in the amount of 2.2 ml rubles.

The system of controls over the target disbursement of humanitarian aid in Saint-Petersburg and Republic of Karelia testifies to insufficient level of interaction between representatives of RF constituent members and law enforcement authorities for the purpose of suppressing action aimed at evading payments to the federal budget. The current control system does not ensure reliable recognition of received goods in accounting documents of the organizations - humanitarian aid recipients and cannot ensure protection of the government's interests.

Ivan Dakhov
(p. 65)

Report on the results of auditing disbursement of funds allocated from the federal budget to the Moscow Region Agro-Industrial Complex in 2002.

The purpose of the audit: disbursement of funds allocated from the federal budget to the Moscow Region Agro-Industrial Complex in 2002.

Objects of audit: Ministry of Agriculture and Foodstuffs of the Moscow region (hereinafter - Minselkhozprod); Federal state institutions "Russian Republican Station of Plant Protection", state institution "Control Informational and Analytical Center of Hunting Animals and their Environment", and other Minselkhozprod objects.

The audit detected inefficient disbursement of federal budget funds in the amount of 26610.1 thousand rubles allocated in 2002 to subsidize the agricultural crop harvest, violation of legal documents that set the procedures for disbursement of federal budget funds, and other violations.

Sergei Shokhin
(p. 86)

Report on results of auditing legitimacy and financial results of federal budget operations with government short-term bonds (GKO) and Ministry of Finance Bonds in the RF Ministry of Finance.

As compared with 1998 the audited period showed changes in the structure of the public internal debt related to government securities in the part of GKO-Ministry of Finance bonds (the share of arrears on government short-term bonds has reduced while the share of arrears on middle-term and long-term government securities - Ministry of Finance bonds has grown), the volume of government securities being placed on the primary and secondary markets gradually increased, in 1999-2000 GKO-Ministry of Finance bonds were basically placed with the purpose of raising funds rapidly for the federal budget to do away with floating, etc.

The audit detected cases of federal budget execution operations made with violation of current legislation.

Mikhail Beskhmelnitsyn
(p. 103)

Report on the results of auditing financial and economic activities of OAO "Krasnoyarskenergo" and Krasnoyarsk Territorial Energy Commission in the part of establishing justified tariffs for sold electric and heat energy in 2001-2002 and implementing the RF Energy Reform Program in compliance with approved legislation.

The audit has found that the basic technological equipment of OAO "Krasnoyarskenergo" has been used for 25 and more years and is morally obsolete. The overhaul made on the basic equipment of hydro electric stations in 2001 and 2002 did not improve significantly the condition of production assets of OAO "Krasnoyarskenergo". Due to the wear of production funds the economic damage in OAO "Krasnoyarskenergo" enterprises amounted to 13.5 ml rubles in 2001-2002.

The outstripping rise of tariffs for electric and heat energy for the population and agricultural consumers is accounted for by the gradual liquidation of privileges by means of providing cross subsidies at the expense of industry and non-production consumers.

The financial position of the enterprise is estimated as unstable, paying capacity and financial sustainability ratios are lower than recommended values. The current ratio of OAO "Krasnoyarskenergo" as on October 1, 2002 does not comply with the standard rate.

Outstripping rates of reforming OAO "Krasnoyarskenergo" in the conditions of the gap between current legislation and proposed amendments thereto as well as without due regard to Krasnoyarsk Territory and energy industry interests may result in negative social and economic consequences.

Sergei Ryabukhin, Gennady Batanov, Mikhail Beskhmelnitsyn, Ivan Dakhov, Alexander Piskunov
(p. 161)

Report on the results of complex audit conducted to check the disbursement of federal budget funds and extrabudgetary funds aimed at financing measures to implement Federal Target Program "Restoration of the Economy and Social Sphere in the Chechen Republic (2002 and the following years)" in 2002 and separate issues of the republican budget execution.

In the conditions of the continuing tension in the region the federal and republican power authorities managed to ensure positive tendencies in the financial and economic transformation and stabilization of life in the Chechen Republic. Financial aid to the Chechen Republic's budget was provided in the full amount in 2002. Yet the delay in approving the regional budget brought about the disproportional funding of 2002 budget expenditures and resulted in the accumulation of cash balances on the Chechen Government's accounts.

The audit showed that the bodies and institutions who are to ensure target provision of pensions, social benefits and other payments to the Chechen population as well as to control the target disbursement of budget funds provided for these purposes do not discharge their functions in the full amount. As a result, there are cases of illegal payments and embezzlements of the said funds. Despite the census conducted recently there is no reliable accounting of residents that require assistance; that creates extra preconditions for non-target disbursement of public resources.

The implementation of the Federal target program is not efficient enough. It was revised twice in 2002, corrections were made without regard to expenses made in 2001-2002 on the development of project estimates, volume of construction and erection work performed at specific sites as well as purchased equipment. The indicators prescribed by the Program were generally not complied with. There were cases of inflated statistics in respect of construction and erection volume.

Mikhail Surkov
(p. 191)

Report on the results of auditing efficiency and target disbursement of federal budget funds allocated for maintenance of the Interior Department in the Ulyanovsk Region.

The purpose of the audit: efficient and target disbursement of federal budget funds allocated for maintenance of the Interior Department in the Ulyanovsk Region in 2002.

The audit of the efficient and target disbursement of federal budget funds and federal assets detected violations in the amount of 17479.90 thousand rubles including the headcount of the Interior department above statutory rates, other than projected use of clothes purchased for federal budget funds provided for maintenance of interior employees, indexation arrears related to the money compensation due to employees of the Ulyanovsk Region interior authorities who were involved in enforcement and public security activities on the territory of the North-Caucasian District, for the period of actual participation in military action, and other violations.

Yuri Voronin
(p. 204)

Analytical report on financing and disbursement of federal budget funds and extrabudgetary funds directed to maintenance, rebuilding and restoration of historical and cultural monuments including especially valuable heritage of nations inhabiting the Russian Federation.

As a result of the analysis conducted it has been found that expenditures made for maintenance of especially valuable heritage of nations inhabiting the Russian Federation are financed from federal budget funds with approved indicators for the respective year; measures to preserve historical and cultural monuments are taken in compliance with federal target programs including Federal Target Program "Culture of Russia (2001-2005)".

Yet there are many important and still unsolved problems in preservation of historical and cultural monuments: the condition of most objects protected by the state as cultural and historical monuments is characterized as unsatisfactory, a considerable part of monuments requires urgent measures to preserve them from dilapidation and even destruction; laws to regulate legal relations in the field of preservation, ownership, use, management and state protection of historical and cultural monuments are to be urgently developed and strict measures are to be taken to comply with the existing regulations in this field.

Vladimir Panskov
(p. 220)

Analytical note on separate problems of RF tax, customs and budget legislation and proposals of solution thereof.

In 2002 the RF Government took measures to follow strategic directions and priorities of the budgetary policy defined in the RF President's Budgetary Address to the Federal Assembly of the Russian Federation "On 2002 Budgetary Policy", and implement Federal law "On 2002 Federal Budget". By the preliminary data the federal budget received 1696.1 bl rubles of tax revenues in 2002 - 237.4 bl rubles more than in 2001. With somewhat reduced growth rates of the most important indicators the economic growth continued, the increase of federal budget revenues is ensured also due to implementation of measures that improve tax administration, enhanced control over tax compliance, removal of drawbacks in the tax and budgetary processes.

Audits conducted by the RF Chamber of Accounts show that many enterprises conceal their revenues, evade taxes and other compulsory payments, minimize tax payments using tax and customs legislation shortfalls.

Some issues of RF tax, customs and budgetary legislation call for urgent consideration and decision-making.

LAW OF THE REPUBLIC OF KAZAKHSTAN
"On Control Over Execution of Republican and Local Budgets"
(p. 242)