Acting Deputy Chairman of Council of Ministers, Minister of Finance Ekaterina Matyushchenko sums up results for 2017

On December 22, according to the agenda of the plenary session, in the framework of parliamentary control over the activities of the Council of Ministers in accordance with the current legislation, the Acting Deputy Chairman of the Council of Ministers, Finance Minister Ekaterina Matyushchenko addressed the deputies with a report on the results of 2017.

In 2017, the Ministry of Finance continued working on the further development and establishing of the financial and budgetary system of the Donetsk People’s Republic.

The key activities of the Ministry were determined on the basis of the main priorities of the state development, the instructions of the Head of the Donetsk People’s Republic and the strategic development plan of the Ministry of Finance for 2016-2018.

Approved at the end of December 2016 by the Decree of the Council of Ministers, the Provisional Regulations on the Budget System of the Donetsk People’s Republic, in which the main directions of the budgeting process were systematized, made it possible to coordinate the work of all participants in the budget process in a single normative legal field.

In order to improve the budgetary legislation in the reporting year, the Ministry has prepared 52 orders in the field of regulation of budgetary legal relations, 38 of which have passed state registration in the Ministry of Justice of the Donetsk People’s Republic.

At the same time, during the interaction with the authorities, the Ministry of Finance has considered and approved 111 draft laws of the People’s Council, 1,333 draft resolutions of the Council of Ministers and more than 1,000 other regulatory documents.

As for the practical aspects of the Ministry of Finance’s activities, I would like to highlight the following performance indicators.

From February to November 2017 for the implementation of the humanitarian programme for the reunification of the Donbass people, the Ministry of Finance has timely financed activities related to its implementation in the areas of health, education, social payments and so on.

Also this year, such socially important programmes and events for the Republic were financed, as:

  • construction of new and restoration of private houses damaged as a result of hostilities;
  • capital repair of the road of the republican importance “Donetsk – Novoazovsk”;
  • provision of solid domestic fuel and compensation payments for its acquisition;
  • acquisition of technical facilities for citizens who received disability in the course of hostilities;
  • dental prosthetics of certain categories of citizens;
  • free meals for children in pre-school and school educational institutions, in health-improving school recreation camps, free travel of children to health improvement in children’s recreation camps;
  • improvement of cities and districts, repair and construction of roads, overhaul of heat and water supply systems, roofs and premises in educational and healthcare institutions.

In order to understand the scale of the spending, the Ministry proposes to consider some indicators related to the repair of public roads and intra-quarter roads in 2013 and 2017 in one of the largest cities – Makeyevka.

So, in 2013, the work on the repair of roads in the amount of 85.5 thousand square meters for a total amount of 21.1 million UAH, or 42.2 million rubles was carried out. In 2017, 242.1 thousand square meters of roads were repaired for the amount of 212.3 million rubles, which is 3 times more than the volume of completed works in 2013.

Due to the stable development of the economy of the Republic, the revenue side of the budget was increased in the reporting period, which in turn allowed raising the pension payments to citizens two-fold.

Thus, according to the decrees of the Head of the Donetsk People’s Republic, from January 1, 2017, the minimum pension payment was increased to 2,600 rubles, and from October 1 all pension payments were raised by 5%.

In this regard, the minimum pension payment in the Republic was 2,730 rubles, which is 43.8% more than in December 2016.

The average pension payment in November of this year compared to November 2016 increased by 10% and amounted to 4,387 rubles.

In the Donetsk People’s Republic, there are no debts on social payments to the population and wages to employees of the budgetary sphere.

Performance indicators of the revenue

For 11 months of 2017, the revenue part of the Donetsk People’s Republic’s budget was fulfilled by 98.4% in relation to the approved plan indicators.

Income for a unified social contribution to compulsory state social insurance by results of work for 11 months of the current year were fulfilled by 111.2% in relation to the approved plan indicators.

Expenditure indicators of the budget

As of December 1, 2017, 2,500 budget institutions and organizations were registered on the territory of the Republic, with over 13,000 clearing and settlement accounts opened.

For today in the Republic a mechanism of distribution of money resources, different from the Ukrainian, is applied. Thus, funds for spending are brought to each specific institution of education, culture, sports. At that, each school, kindergarten, or library independently manage their own funds, determine the necessity and priority of spending certain expenses.

The budget of the Donetsk People’s Republic in 2017, as in previous years, is socially oriented.

So, about 80% of budget expenditures fall on labour remuneration, social payments to the population, pensions, scholarships.

With regard to the details of budget expenditures in the following areas:

  • social protection and social security account for 40% of the basic budget indicators;
  • the education sector – 18.6%;
  • healthcare – 12.5%;
  • the power bloc and the judiciary – 9.4%.

Actual dynamics in the main directions of the budget expenditures:

  • payroll accruals increased by 16.2% in 2017;
  • expenses for medicines – by 21.2%;
  • expenses on the purchase of food products – by 8.8%;
  • social security – by 9.8%;
  • payment of utilities and energy carriers – by 64.5%.

Timely financing of budget expenditures creates the necessary prerequisites for economic growth in the Republic.

Control measures of the Ministry of Finance

In the course of exercising their powers, the Ministry of Finance carries out the necessary functions of financial control over compliance with the budget legislation.

According to the results of control measures, for the 11 months of the current year 826 warnings were issued on violation of budget legislation.

The main reasons for the formation of warnings were:

  • violation of the terms for the provision of legal and financial obligations (contracts, invoices, consignment notes, certificates of work performed) for registration – 67%;
  • violation of the requirements for the preparation and submission of financial statements – 23%.

Based on the results of the preliminary and ongoing monitoring of the budget funds’ expenditure, the Ministry of Finance has issued more than 1,000 refusals to register liabilities to budget institutions and organizations, which allowed preventing violations of budget legislation amounting to more than 80 million rubles.

The subsequent control over the rational and efficient use of budgetary funds was carried out in accordance with the Control and Audit Work Plan.

The total number of control activities carried out in 2017 was more than 1,000 scheduled audits and counter checks.

As a result of the measures taken, violations of the current legislation were found for a total of 375.4 million rubles, violations for the amount of 167.6 million rubles were eliminated.

Licensing activity

The Ministry of Finance, as a specially authorized body on licensing issues, constantly carries out the necessary measures in this direction.

In order to create a single information base, the automated system “Licensed Register” was put in place in 2017. This software package allows to properly record licenses issued by the licensing authorities, to have operational knowledge of the current and cancelled licenses.

So, on the current day, licensing authorities have issued some 4,500 licenses to business entities, including 2,163 licenses in 2017.

At that, 7.2 million rubles were allocated to the profitable part of the republican budget as a fee for issuance, update and renewal of licenses.

In order to prevent illicit trafficking of precious metals, the Ministry of Finance, through the State Treasury Enterprise of Assay Control, has continued its efforts to ensure branding of jewellery.

As of December 1, 2017, the Ministry of Finance registered 225 business entities engaged in operations with precious metals and precious stones.

In the current year, the branding of jewellery in the amount of about 305 thousand units with a total mass of more than 1,000 kilograms was carried out.

In addition, the republican budget was replenished to the amount of about 500 thousand rubles for precious metals handed over in the form of waste and scrap.

Appeals and reception of citizens

The Ministry of Finance continues carrying out work on providing the citizens of the Republic with explanations and consultations on matters within its competence on an ongoing basis.

As of December 1, 2017, 6,448 appeals of citizens of the Republic were accepted and considered.

Also, employees of the Ministry of Finance considered 193 deputy appeals, 267 receptions of citizens in public reception offices of the Ministry of Finance and within the public reception of the public movement “Donetsk Republic” has been carried out.

Interaction with financial institutions

In order to combine scientific and practical knowledge, development of public sector cooperation with higher educational institutions of the Republic, the Ministry of Finance acted as an organizer and participant of a number of events in the educational sphere.

So, during the reporting year, meetings with students of higher educational institutions have been held; the passage of students’ pre-diploma practice and field defence of their theses have been organized; the leading specialists of the Ministry have taken part in the work of international scientific and practical conferences, councils for the protection of dissertations, courses for the upgrading of the skills of state civil servants.

Openness of the Ministry

The Ministry of Finance, in the course of fulfilling the tasks and functions assigned to it, implements measures to increase the information openness of the Ministry’s activities.

The official website of the Ministry of Finance contains information on budget policy, licensing, financial monitoring.

Functional sections of the official site are relevant and allow real-time monitoring of all innovations, clarifications and methodological recommendations in the financial sector of the Republic.

To date, the financial system of the Donetsk People’s Republic has a clear legal regulation and creates a solid foundation for sustainable development and the formation of a healthy economy.

The information was provided by the press service of the Ministry of Finance of the DPR

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