Accounts Chamber reveals $20.9bn-worth violations
In 2017, the amount of violations in the course of budget funds expenditure doubled.
According to the Accounts Chamber, in 2017 the number of violations in the course of budget funds expenditure doubled compared to the previous year. Then the state audit revealed violations amounting to 956.8 billion rubles, in 2017 this figure reached 1.87 trillion rubles ($20.9bn).
This amount is equal to 5.8% of the expenses of the entire state, which budget in 2017 amounted to 32.4 trillion rubles ($523bn). Also, the number of violations increased from 3.8 thousand in 2016 to 6.5 thousand in 2017.
According to director of the HSE Centre of Development Institute Natalia Akindinova, two factors could affect the growth of violations. Firstly, the quality of the audit itself improves, and, secondly, the uncertainty associated with elections, personnel reshuffles in the government and the situation in foreign policy. As a result, the desire to ‘earn’ is increasing.
Corruption, according to the Accounts Chamber, composes 2% (about 40 billion rubles) of the total amount of financial violations in 2017. Akindinova suggests that the new government appointment will lead to violations’ decrease. So, Anton Siluanov, whose candidacy was put in by Dmitry Medvedev, is the possible vice-premier supervising the financial and economic ministries. Tatyana Golikova, who previously heads the Chamber, will become the deputy chairman of the government for the social policy, and Alexei Kudrin will take the post of the audit department head.
Alexander Shurakov, senior analyst of ACRA - Analytical Credit Rating Agency, associates the increase in the number of violations with audits’ improvement. He cites data that there were disclosed more violations (by 68%) compared to the previous year, which explains the twofold increase in the amount.
Also in 2017, out of 1.87 trillion rubles, the number of violations related to the accounting records maintenance amounted to 813.6 billion rubles. Compared to previous years, this indicator has grown significantly, which Shurakov explains by the Accounts Chamber's operational enhancement.
599 million rubles disappeared during the formation and execution of the budgets, while 118 million rubles were siphoned off on state purchases. The sectors with the highest indices of violations are the space industry and the defense.
The space industry sets up the record - 151 violations for 785.5 billion rubles were revealed.
When checking the vacation of the Federal Space Agency liquidation commission and the transfer of its property to the Rosсosmos state corporation, violations for 627.4 billion rubles were committed. The primary violations' list consists of untimely or incomplete transfers to the budget of revenues from the use of state property, violation of the procedure and terms of payment for employees, violation of the requirements for keeping records and storing documents.
After checking the work of the entire space industry for 2017, the auditors sent 120 materials to the Investigative Committee, two - to the Prosecutor General's Office and one to the Interior Ministry. Also, the Accounts Chamber sent 11 information circulars to the President and the Government. Almost all final inspection documents are marked "for official use" and "top secret." The investigative authorities received nine materials of the Prosecutor’s Office checks on misuse of budget funds, into which eight criminal cases were initiated.
The Accounts Chamber found violations amounting to 544.5 billion rubles in the defense sector in 2017. The main violations are unregulated assistance to military medical institutions for persons of non-preferential categories, use of funds allocated for the implementation of the State Program of Armaments 2011-2020 for the modernization and maintenance of ten information systems and particular software products.
In addition, as regards the capital construction of 87 facilities of the Ministry of Defense, there were no legal acts of the government and the Ministry of Defense on the preparation and implementation of budgetary investments in state-owned property; the initial authorization documentation for 229 facilities of the Ministry of Defense, which were to be built in 2016, was not organized, and it has also been revealed that the prices of state contracts and military products have been inflated.
Based on the results of the audits, the Accounts Chamber sent 34 submissions, as well as six prescriptions. Six materials were submitted to the Prosecutor's Office, after examination of which 36 prosecutors' submissions were rendered, seven warnings about the inadmissibility of violation of the law, as well as two cases of administrative violations and one criminal were initiated.
Due to the secret nature of space and defense industries, the public has no way of monitoring and influencing their work, which indirectly increases the possibility of violations.
According to the member of the Military Industrial Commission expert council, Colonel Viktor Murakhovsky, violations are aligned with incorrectly executed documents or competitive procedures wrongs. He stresses that it was practically impossible to commit embezzlements in the sector after enacting legislation in 2017 on a list of funds not subject to fiscal in-service control.
FSB officers detained Leyla Mammedzade along with Ziyavudin and Magomed Magomedov on March 30 this year. After questioning her for two days, they released her. In April, Mammedzade stepped down from her post. At the moment, she is not a defendant in the case of Summa Group owners.