Annual meeting

of the INTOSAI Working Group on Public Debt

23 – 25 May 2019Baku, Azerbaijan

Strategic audit of the public debtof the Russian Federation

Public Debt and Financial Assets Audit DepartmentDeputy Head of Inspection

Tatiana Otrokhova

Strategic audit as a priority audit area 2

The Federal Law "On the Accounts Chamber of the Russian Federation" provides for

Financial audit,accompanied by

Compliance auditStrategic audit Performance audit

Increase in the share of strategic audit in the activities portfolio of the Accounts Chamber

Methodological development of strategic audit with a focus on analytical function

Development Strategy of the Accounts Chamber

of the Russian Federation

for 2018-2024

3Strategic audit goals

Strategic audit is performed in order to assess the feasibility, risks and results of achievingthe goals of socio-economic development of the Russian Federation, which are provided forby the strategic planning documents

Strategic planning documents on public debt and public borrowing are the following:

State programme of the Russian Federation "Public Finances Management and Financial Markets Regulation" for implementation in 2013-2024

Activity plan of the Ministry of Finance of the Russian Federation for 2019-2024

Subprogramme 4 "Public Debt and Financial Assets Management, Enhancing

the Impact of Engagement in International Financial and Economic Relations"

Budget forecast for the Russian Federation up to the year 2036

4Budget forecast for the Russian Federation up to the year 2036

IndicatorValue of the indicator

2017* 2018* 2019 2020 2025 2030 2035 2036

Revenues,as a percentage to GDP

16.4 18.8 18.9 18.3 16.0 15.0 14.3 14.2

Expenditures,as a percentage to GDP

17.8 16.1 17.0 17.2 16.0 15.6 15.0 14.8

Deficit / surplus,as a percentage to GDP

-1.4 2.7 1.8 1.1 0.0 -0.7 -0.7 -0.7

Public debt,as a percentage to GDP

12.6 12.1 13.9 15.0 16.4 16.4 16.2 16.1

*Actual values

Federal budget key indicators forecast up to the year 2036

5Budget forecast for the Russian Federation up to the year 2036: risk management of the contingent liabilities

Measures to establish contingent liabilities management system

Risk mitigation on the part of state companies

Monitoring of and control over debt burden of state companies Inclusion of state companies in the public finance statistics with a view to monitor the general level of

debt

Enhancing the effectiveness of development institutions

Formalization of support for development institutions with a view to streamline the regulation of relevant budgetary risks

Development of accounting and risk analysis mechanisms within the public-private partnership

Providing for quality of project accounting under the public-private partnership Accounting of guarantees for projects under the public-private partnership Enhancing the role of financial bodies at all stages of preparation and implementation of projects

Other measures

Stricter requirements for debt sustainability of the sub-federal political units of the Russian Federation

6Goals and tasks of Subprogramme 4

in the realm of public debt management

Tasks Ensuring the acceptable and economically reasonable volume and structure of the public debt of

the Russian Federation provided that the borrowing costs are minimized

Improving state policy on the public debt of the sub-federal political units of the RussianFederation

Facilitating socio-economic development of the Russian Federation by engaging with multilateraldevelopment banks in managing projects funded by loans from these banks

Goals Effective public debt and financial assets management in the Russian Federation

Ensuring interaction between the Russian Federation and the international economic andfinancial organizations including multilateral development banks

Public debt indicators of Subprogramme 4 andActivity plan of the Ministry of Finance of the Russian Federation

7

IndicatorUnit of

measurement

Value of the indicator

2018 plan 2018 fact 2019 plan 2021-2024 plan

Public debt of the Russian Federation to

GDP, not more than% 20 12.2 20 20

Public debt service to federal budget

expenditures, not more than% 10 4.7 10 10

Annual public debt principal repayments

and servicing to federal budget revenues,

not more than% 15 7.8 15 15

Public internal debt to the total amount of

public debt, not less than% 65 72.9 65 65

Target value of the debt portfolio* duration

for relevant year, not less thanyears 4.2 4 4.6 5

*Debt obligations not including government guarantees

Public Debt and Financial Assets Audit Department of the Accounts Chamber conducts strategic audit of the state programme

"Public Finances Management and Financial Markets Regulation"

8

Strategic audit includes

at the stage of implementation at the follow-up stageat the stage of development

Feasibility assessment of the provisions of a strategic planning document and resourcing of its activities, quality assessment of the indicators set forth in a strategic planning document

Assessment of the management system for development and implementation of a strategic planning document

Assessment of the risk management system and the system for monitoring and control of the implementation of a strategic planning document

Provisions for the audit of strategic planning documents at the following stages

Methodological guidelines on organizing and conducting strategic audit (authorized by the Board of the Accounts Chamber of the Russian Federation in December 2016)

Thank you for your attention!

Dear colleagues!

We are interested in exchange of experience in strategic audit methodology in the area of

public debt

Annual meeting

of the INTOSAI Working Group on Public Debt Audit

23 – 25 May 2019Baku, Azerbaijan