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10/30/2018

The Issues of Using the Union State’s Property Still Not Regulated

The supreme audit institutions of Russia and Belarus held a regular joint meeting of the boards on the execution of the Union State’s budget for 2017. The meeting was held in the form of a video conference and was chaired by the heads of the Russian and Belarusian SAIs – Alexey Kudrin and Leonid Anfimov.

Alexey Kudrin said: “I am very pleased to once again consider our joint issues. I want to remind you that, next year, we have the 20th anniversary of signing the Treaty on the establishment of the Union State. And surely, we have achieved some results in our cooperation. First, our trade, economic and investment cooperation has increased by many times. The amount of Russian investment in the Republic of Belarus exceeded 4 bln dollars. But today, I want to say that it is not enough.” According to him, the Russian private business should show also investment activity in Belarus.

Following the audit, the parties noted many positive achievements in the field of legal regulation of the Union State’s budget process.

Thus, based on the recommendations of the supreme audit institutions of Russia and Belarus, the following documents were approved in April 2018: The procedure for the Preparation and Approval of Cost Estimates for Functioning of the Parliamentary Assembly and the Standing Committee and the Estimates of Income and Expenses of the Broadcasting Organization of the Union State; the Regulations on the Procurements by the Union State’s Bodies and Institutions; the Procedure for Compiling and Submitting Budget Reports; the Guidelines for Budget Accounting.

In addition, a new edition of the Procedure for Developing and Implementing the Union State’s Programs has been finally approved. As Alexander Zhdankov, an auditor of the Accounts Chamber of the Russian Federation, stated during his speech at the Board’s meeting, “The approval of the Procedure took almost 4 years, which did not contribute to improving the development quality and the implementation efficiency of Union’s programs. However, I can state in general that our recommendations have been taken into account. We fixed the requirement to implement the results of the program execution by public customers and to monitor their use in practice; we set the timing for the development and coordination of draft programs in order to maintain their relevance at the start of their implementation.”

At the same time, despite the results achieved, not all issues have been resolved. Thus, there is still no procedure (method) for planning non-tax budget revenues of the Union State in terms of their sources; although the Procedure for Forming and Executing the Union budget was approved in 2015, it already requires amendments.

In 2017, the execution of the Union State’s revenue budget amounted to RUB 6.8 bln, exceeding the planned figure by 1%. However, the expenditures budget was executed by only 84.6% (RUB 4.1 bln), what is the worst figure since 2014. The balance of the Union budget increased by 38% since the beginning of 2017 and amounted to RUB 2.8. As in previous years, the main reasons for non-execution of the budget are the long approval of estimates, late tender procedures, and the late conclusion of contracts.

To date, no decisions have been taken on restructuring or relieving debts on budget loans provided on a reimbursable and returnable basis in 1998–2002 from the budgets of the Union State. Meanwhile, the arrears on them amounted to RUB 2.4 bln as on January 1, 2018, of which the principal debt accounts for only RUB 546 mln (21.8 %), and the rest is interests (RUB 677.1 mln) and penalties (RUB 1.2 bln). Alexander Zhdankov stressed that, “We initially recommended restructuring or relieving debts. However, the draft resolution of the Council of Ministers on debt relief, prepared by the Standing Committee of the Union State, was not approved by the relevant ministries of the Member States; no measures for debt restructuring were taken; however, there is nobody from whom to recover the debt.”

There are still urgent issues related to the Union State’s property created and purchased at the expense of the Union’s budget as part of implementing the Union’s programs and activities. The necessary legal framework in this field has not been created. In particular, there is no procedure for registering the Union State’s property rights; the parties’ responsibility for accounting, preservation, and disposal of property has not been established. The concept of the Union State’s Property Registry and the procedure for keeping the same have not been legally regulated. The task of creating a special body for the Union State’s property management has not been fulfilled. Alexander Zhdankov stated that “As a result, the Union’s budget does not receive the revenue from using the Union State’s property.”

Following the discussion, the parties approved the joint Conclusion on the report of the Council of Ministers of the Union State on the execution of the Union State’s budget in 2017, which will be submitted to the Parliamentary Assembly of the Union of Belarus and Russia and to the Standing Committee of the Union State. In addition, it was decided to send petitions to the State Secretary of the Union State and to the Chairman of the Broadcasting Organization of the Union State, as well as information letters on the results of the audit activities to the Chairman of the Supreme State Council of the Union State, and to A.G. Lukashenko, the President of the Republic of Belarus.

During the meeting, the parties also approved the Plan of Join

t Activities in 2019.


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