1. Prospects for Development of the Federal Treasury Control Powers
Deputy Head
A. Demidov

2. STATE FINANCIAL CONTROL (AUDIT) POWERS OF THE FEDERAL TREASURY
PRESENTATION OUTLINE
STATE FINANCIAL CONTROL (AUDIT) POWERS OF THE FEDERAL TREASURY
TREASURY SUPPORT AS A RELEVANT FORM OF STATE FINANCIAL CONTROL (AUDIT)
CONTINUOUS STATE FINANCIAL CONTROL (AUDIT) AS A VIABLE FORMAT FOR EXERCISING CONTROL POWERS
GLOSSARY
A spending unit: a public/municipal body or a state institution entitled to make and/or meet expenditure commitments on behalf of a public law entity using funds from the respective budget
A budget user: a legal entity, a sole proprietor or an individual engaged in the production of goods/performance of works/ provision of services that receives funds from the budget on the basis of legislation (decision)

3. STATE FINANCIAL CONTROL (AUDIT) POWERS OF THE FEDERAL TREASURY

4. PUBLIC/MUNICIPAL FINANCIAL CONTROL (AUDIT) SYSTEM IN THE RUSSIAN FEDERATION
Federal Accounts Chamber:
The supreme state financial control authority
Russian Federation
Federal Treasury
delegation of authority
Federal Service for Financial and Budget Oversight
Russian regions
Regional control and accounts authority
Regional Office of the Federal Treasury
Regional internal state financial control authority
Municipalities
Municipal control and accounts authority
Regional Unit of the Regional Office of the Federal Treasury
Regional internal municipal financial control authority

5. FEDERAL TREASURY CONTROL POWER DEVELOPMENT FACTORS
Programmatic approach to governance
Securing the rule of law and efficiency in contractual relations
Delegation of functions of the abolished Federal Service for Financial and Budget Oversight to the Federal Treasury:
- Fiscal control and oversight
- External quality control of auditors

6. FEDERAL TREASURY CONTROL (AUDIT) IN PROCUREMENT OF GOODS, WORKS AND SERVICES
PLANNING
PROCUREMENT PROCESS
CONTRACT EXECUTION
PROCUREMENT RESULTS
Procurement plan
Time plan
Procurement Notice, procurement documents,
supplier/provider/contractor selection (work the committee, minutes)
Register of Contracts,
supporting documents
(bill, invoice, etc. )
Procured goods/works/services
Preliminary control
- Compliance with requirements to justification of budgetary allocations;
- Control of procurement plan alignment with budget commitment limits
Consistency of information on procurement identification code and level financial support with procurement plan data
Consistency of information on procurement identification code and level financial support given in the Procurement Notice, procurement documents, minutes, and draft contract with the time plan
Consistency of information on procurement identification code and level financial support given in the Register of Contracts with contract terms and conditions
Follow-up control
- Compliance with requirements to procurement justification;
- Compliance with norm setting rules in procurement
Justification of the initial contract price (price ceiling)
Management of the Register of Contracts;
Authorization of expenses and contract payment;
Consistency of procured goods /works/services with contract terms and conditions;
Use of penalties by the client in case of contract breach;
-Timeliness, completeness and reliability of records on procured goods/works/services in books and accounts
Consistency of procured goods/works/services with procurement objectives

7. Prospects for federal treasury control (audit) in procurement of goods, works and services
PLANNING
PROCUREMENT PROCESS
CONTRACT EXECUTION
PROCUREMENT RESULTS
Procurement plan
Time plan
Procurement Notice, procurement documents,
supplier/provider/contractor selection (work the committee, minutes)
Register of Contracts,
supporting documents
(bill, invoice, etc. )
Procured goods/works/services
- Catalog of goods/works/services (name of procured items, part of procurement identification code, cost structure, price);
- Information on reference prices;
- Establishment of an objective initial contract price (price ceiling)
List of procurement committee members
(name, position, length of service in the committee, and other details):
- Identifying cases of affiliation with suppliers
Register of cooperation of public contract implementing/co-implementing entities (information on legal entities: name, legal status, founder, other data):
Identifying affiliated implementing entities;
Providing for transparency of public contract implementation, including prevention of movement of budget funds to tax havens, and combating contract implementation by fly—by-night companies)
Efficiency of procurement of goods/works/services
PROSPECTS

8. MAIN flows to be subject to state financial control (audit)
PUBLIC CONTRACT
CONTRACT/AGREEMENT
CONTRACT/AGREEMENT
Flow 1
(CLIENTS AND IMPLEMENTING ENTITIES)
SPENDING UNIT/ CLIENT
LEAD IMPLEMENTING ENTITY
Level 1 implementing entity
LEVEL 2 IMPLEMENTING ENTITY
GOODS,
WORKS,
SERVICES (GWS)
GWS
GWS
Flow 2
(FEDERAL
TREASURY BODIES)
FUNDS
FUNDS
FUNDS
Individual account of the spending unit
Account where the budget user’s transactions are recorded
Account where the budget user’s transactions are recorded
Account where the budget user’s transactions are recorded
ACCEPTANCE DOCUMENTS
ACCEPTANCE DOCUMENTS
ACCEPTANCE DOCUMENTS
FUNDS
ACCEPTANCE DOCUMENTS
FUNDS
ACCEPTANCE DOCUMENTS
FUNDS
ACCEPTANCE DOCUMENTS
Flow 3
(LENDING INSTITUTIONS)
Settlement account
Settlement account
Settlement account
Flow 4
(TAX AUTHORITIES)
INVOICE FOR GWS
INVOICE FOR GWS
INVOICE FOR GWS
Taxpayer account
Taxpayer account
Taxpayer account
Taxpayer account

9. Contract ID Federal Tax Service Federal Treasury Lending institutions
IT ENVIRONMENT OF INTER-AGENCY COOPERATION IN THE COURSE OF CONTROL (AUDIT)
Federal Financial Monitoring Service
Federal Tax Service
Federal Treasury
Automated Tax Information System
Official website of the Unified Information System
Unified Information System for operations (transactions) involving money or other property
Automated VAT Control System
GIS E-Budget
Information on invoices;
Information on ‘high risk’ legal entities and individuals in respect of which/whom there are data on:
- Tax evasion;
- Availability of receivables;
- Registration in the List of Mala Fide Suppliers;
- Other information (Register of Complaints, control findings);
Information submitted by regional offices;
Unified State Register of Legal Entities, Unified State Register of Sole Proprietors, Unified State Register of Taxpayers.
Lending institutions
Application SW ‘Automated System of the Federal Treasury’
Information on individual account transactions;
Register of Contracts (Federal Law # 44-FZ);
Register of Deeds (Federal Law # 223-FZ);
Register of Agreements ;
GWS Catalog containing information on pricing structure, including costing by cost element;
System of reference prices for goods, works and services;
Information submitted by regional offices.
Information on settlement account transactions;
Information on ‘high risk’ legal entities and individuals in respect of which/whom there are data indicating their involvement in extremism or terrorism;
Other information (inter-agency cooperation, control findings);
Information submitted by regional offices.
Contract ID

10. State financial control (audit) powers of the federal treasury
Forms
CONTROL
AUDIT
MONITORING
types
types
types
Preliminary control
Follow-up control
Operational and financial audit
Control audit
Monitoring of the federal state information system
Monitoring of information systems managed by the controlled (audited) entity
methods
Accounting for items subject to control (audit, monitoring)
Examination
Review
Review
Observation
Observation
accounting records
act
opinion
opinion
certificate
certificate
Documentary control (authorization)
Review
Analysis
Analysis
Analysis
Analysis
permissive resolution
act, report
certificate
certificate
certificate
certificate
Actual control (review)
Inspection
EXPENDITURES ON PROCUREMENT OF GOODS, WORKS AND SERVICES; IN 2015, BUDGET INVESTMENT, INTERGOVERNMENTAL TRANSFERS AND SUBSIDIES ACCOUNTED FOR 74% OF TOTAL FEDERAL BUDGET EXPENDITURES
certificate
certificate
TREASURY SUPPORT

11. 2. TREASURY SUPPORT AS A RELEVANT FORM OF STATE FINANCIAL CONTROL (AUDIT)

12. TREASURY SUPPORT OF FUNDS ALLOCATION OF FUNDS FOR SPECIFIC NEEDS
under public contracts and contracts/agreements
under agreements on provision of subsidies (earmarked funds) to legal entities
under agreements on provision of intergovernmental transfers
PECULIARITIES:
ALLOCATION OF FUNDS FOR SPECIFIC NEEDS
The Federal Treasury opens accounts for budget users, i.e. legal entities implementing public contracts and recipients of earmarked funds.
The Federal Treasury authorizes transactions
Submission of reporting documents
IMPACT:
Funds channeled to the economy
Control of eligible use of funds
“Coloring” of cash flows
Improved liquidity of the Unified Control System

13. TREASURY SUPPORT OF PUBLIC CONTRACTS AND CONTRACTS/AGREEMENTS
CONTRACT/AGREEMENT
CONTRACT/AGREEMENT
Public Client
Lead implementing entity
Level 1 implementing entity
Level 2 implementing entity
GWS
GWS
GOODS, WORKS, SERVICES (GWS)
ADVANCE PAYMENT
ADVANCE PAYMENT
ADVANCE PAYMENT
Individual account of the spending unit
(03 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
FEDERAL TREASURY
Current transactions
Current transactions (final settlement)
Current transactions (final settlement)
reimbursement
reimbursement
reimbursement
settlement account
settlement account
settlement account
LENDING INSTITUTIONS

14. treasury support of contracts/agreements on provision of subsidies (earmarked funds) to legal entities
Order by the Chief Administrator of Budget Funds to delegate the spending unit’s authority to transfer subsidy to the legal entity
CONTRACT/AGREEMENT
Chief Administrator of Budget Funds
Regional Treasury Office to which the authority was delegated
Implementing legal entity
Implementing (co-implementing) entity
GOODS,
WORKS,
SERVICES (GWS)
Information on the uses of earmarked funds, payment order,
contract/agreement, documentary evidence of financial obligation
Budget commitment limit
Consolidated request for support
Advance payment
Individual account of the spending unit
(03 l/sch)
Opening of account for the purposes of delegated authority
(14 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
FEDERAL TREASURY
Payment
order
reimbursement
Current transactions (final settlement)
LENDING INSTITUTIONS
settlement account
settlement account

15. treasury support of contracts/agreements on provision of interbudgetary transfers
Order by the Chief Administrator of Budget Funds to delegate the spending unit’s authority to transfer subsidy to the legal entity
AGREEMENT on
provision of funds
Chief Administrator of Budget Funds
Regional Treasury Office to which the authority was delegated
Designated authority – Russian region
Legal entity
AGREEMENT on
provision of funds
Consolidated request for support
Individual account of the spending unit
(01 l/sch)
Opening of account for the purposes of delegated authority
(14 l/sch)
Individual account of the spending unit
(03 l/sch)
Account where the budget user’s transactions are recorded
(41 l/sch)
Budget commitment limit
FEDERAL TREASURY
Payment order
Transfer of funds
settlements
settlement account
LENDING INSTITUTIONS

16. 3. CONTINUOUS STATE FINANCIAL CONTROL (AUDIT) AS A VIABLE FORMAT FOR EXERCISING CONTROL POWERS

17. CONTINUOUS STATE FINANCIAL CONTROL (AUDIT) OF FUNDS ALLOCATED FROM THE BUDGETS OF THE BUDGET SYSTEM OF THE RUSSIAN FEDERATION
FEDERAL TREASURY
‘Violations Not Found’ opinion
review of documents
visual review
(if necessary)
authorization 2 3
‘Violations Found/Not Found’ opinion
1. Request for provision/transfer of funds
2. Contract
3. Supporting documents for transfer of funds
reaching items under review
2.1 1
2.2 4
transfer of funds
Spending unit/Public Client
Goods, works, services
(controlling the fact of procurement )
Implementing (co-implementing) entity

18. Results of preliminary control
Summing up:
EXPECTED IMPACT OF THE NEW MODEL OF STATE FINANCIAL CONTROL (AUDIT)
Prevention of violations
Shifting emphasis to the preliminary control stage
Physical control in addition to documentary control
“Coloring” of cash flows
Assessment of the cost of goods, works and services
Modification of the result review process
Results of preliminary control
(a source to identify items to be subject to follow-up control)

19. Thank you!
A. Demidov