20 january 2009

Vladimir Putin met with Sergei Stepashin, Chairman of Russia's Audit Chamber

Vladimir Putin and Sergei Stepashin discussed the Audit Chamber’s plans for 2009, particularly the control of disbursement of government funds by major banks and the monitoring of budget allocations for the stabilisation of South Ossetia.

Transcript of the beginning of the meeting:

Sergei Stepashin: First of all, let me talk about our plans for this year, for the key areas of our work. I would also like to lay out the changes in our work in the current financial and economic situation, to cover several areas we did not include before.

First, we are constantly monitoring the disbursement of budget funds by major banks. We are authorised by law to inspect banks with government investment. But now we are specifically tracking the schemes of budget fund allocation. Moreover, one of our auditors has been appointed, upon Vneshtorgbank's initiative, to the committee that distributes budget funds. It is very important.

Second, we have 295 priority companies to monitor, as determined by the Government. You are well aware that we monitor both the public and private sectors. We have put these companies under ongoing scrutiny to make certain that budget allocations reach their targets. It is a vast and time-consuming process.

In this connection I have written a statement to ask you to issue an instruction that we cooperate with the Government's internal control bodies and relevant executive agencies. We already have cooperation agreements with the Interior Ministry, the Federal Security Service and Prosecutor's Office.

Third, it is extremely important today that we monitor the situation in the regions. We have undertaken a high workload - about 45 Russian regions, most of them with government financing exceeding their respective contributions (over 50% of all budget transfers). These regions are entitled to state support, which we should therefore monitor while keeping the Government informed.

Now I will report on the South Ossetia issue.

We have conducted the first joint inspection of Russian budget allocations for the restoration of Tskhinval and the general financial and economic support of South Ossetia.

We also arranged a three-week training session for the local auditors in Vladikavkaz.

They have an agency similar to the Audit Chamber; we issued them licences. They conducted audits which provided us with valuable information and helped us conduct the training and joint inspection.

You certainly know how serious their problems are. I know that the Government has made a timely decision to establish a directorate. We've used the example of restoration from the Chechen Republic. Although I do not want to trace direct similarities as the situation was somewhat different there, the restoration of financial institutions and financial control is extremely important for the distribution of budget funds.

I have a series of specific proposals that I am ready to discuss with you.

I would also like to hear your own proposals on cooperation with the Audit Chamber, maybe some advice you can offer.

Vladimir Putin: Good, I was going to suggest paying closer attention to the regions, but you have already mentioned that.

You know that we have allocated over 43 billion roubles to support the regions, especially to create jobs there. There are regional programmes waiting for government approval. They will soon be approved.

There is another important point. You know that Parliament has supported the plan to issue a significant amount of federal funds to the Government to enable it to respond promptly to economic challenges. I have no doubt that the funds are used as efficiently as possible, but additional supervision by the Audit Chamber is still advisable.

Sergei Stepashin: I think we'll inform you of the progress regularly.