Why would the Federal Treasury need the Federal Service for Fiscal and Budgetary Supervision?

In order to reform the system of the collection of fiscal payments, optimize the system of financial control and supervisory agencies within the structural transformations of the Government of the RF the Federal Service for Fiscal and Budgetary Supervision (Rosfinnadzor) was abolished by the Decree №41 of the President of the RF from 02.02.2016 «On some issues of state control and supervision in the financial and budgetary sphere». 

Following functions of control and supervision were laid upon the Service:

1) in the financial and budgetary sphere the Federal Service for Fiscal and Budgetary Supervision was empowered to monitor the compliance with the budget legislation of the RF, reporting on implementation of government programs, compliance with the valuation rules in the field of procurement, substantiation of an initial price of a contract, imposition of penalties by a customer, compliance with delivered goods, supply report and use of it or provided services as intended etc.; 

2) compliance with the currency legislation of the RF, accordance of foreign exchange operations with conditions of licenses and permits;

3) quality of work of audit firms;

4) analysis of the execution of the budget powers of the bodies of state financial control;

5) analysis of the conduction of internal financial control and internal financial audit by chief administrators of the federal funds;

6) compliance with the requirements of financial control in the area of procurement, goods, works and services

According to the law, all control and supervisory powers of the Federal Service for Fiscal and Budgetary Supervision should go to the Federal Treasury. The main functions of the Treasury are:

• organization of the system of relationships with banks;
• operational planning and optimization of cash flows;
• controlling;
• financial risk management.

The Federal Service for Fiscal and Budgetary Supervision and the Treasury complete similar tasks, for example, concerning the supervision of the financial discipline, execution of the budget, budget postings. Therefore, the amalgamation of the Federal Service for Fiscal and Budgetary Supervision and the Treasury, which are included structurally in the Ministry of Finance, by joining of the first organization to the second one, with the transfer of control and supervisory powers of the Federal Service for Fiscal and Budgetary Supervision to the system of the Treasury, seems to be logical and meets the requirements of today's time. The functions of currency control in this case are decided to allocate between the Federal Tax Service and the Customs Service of the RF. 

The control of expenditure of budgetary funds in today’s difficult conditions is remaining a very important task. As much as this control must be effective, the Treasury should fully adopt the functions of the abolishable Rossfinnadzor until the end of the current year. According to the decree of the Government of the RF, the Federal Service for Financial and Budget Supervision would be eliminated before September 1, 2016.  

Thus, all departments responsible for budget revenues will be collected in the structure of the Ministry of Finance: the Federal Tax Service of the RF, the Federal Service for Fiscal and Budgetary Supervision and the Federal Treasury, Federal Customs Service of the RF and the Federal Service for Alcohol Market Regulation (Rosalkogolregulirovanie).