“Citizens need to know how their money is spent”: Alexey Kudrin, Head of the Accounts Chamber, on new audit methods

- Alexei Leonidovich, we are talking on the sidelines of the Congress of the International Organization of Supreme Audit Institutions (INTOSAI), where this year the Accounts Chamber of Russia became the chairman of the organization of supreme audit bodies, and you are its president. What are your key goals for the next three years - during your chairmanship?

- INTOSAI is an international organization, which includes the heads of almost all the accounting chambers. It is the second largest organization after the United Nations. It is non-political, therefore all countries are ready to participate in it - and actively participate. Here, at the forum, representatives of 169 states are present - this is the most representative congress in history.

Now, not just a financial audit is coming to the fore - what we call a “compliance audit” when we confirm that all documentation is reliable. The issues of the effectiveness and efficiency of those tools and those programs that are being adopted come to the fore. Therefore, not all countries have managed to move to this new level. For six months we have been preparing a report on strategic approaches to auditing based on the results of the monitoring of the national sustainable development goals that the UN has proclaimed.

• Head of the Accounts Chamber of Russia Alexei Kudrin on new approaches to auditing

Another challenge is the challenges of the technological revolution. Auditing is becoming digital, and auditors are the most risky group because they are quickly reduced and replaced by algorithms or machines. But the role of analysts is growing - specialists who are able to analyze, create analysis models based on big data. Accordingly, we must increase our competencies. We offer a number of new formats: online courses, exchange of views, a database of best practices that will be available to all auditors around the world. And of course, open data.

Open data is when states finally begin to upload a range of data and statistics. We have a lot of departmental statistics in Russia, but it is closed. We, in general, are not in the forefront of open data. Therefore, the Accounting Chamber wants to promote open data programs. Because ultimately, citizens need to know how their money is being spent.

- You just mentioned the introduction of digital technology. And how can they help the work of federal auditors?

- New technologies translate a lot of routine paper work into an electronic, automated form. Now we need analysts who can create these programs, are able to analyze them, and compare digital and high-quality data. The number of methods that we will use is expanding. For example, it becomes mandatory for our Accounts Chamber to analyze not just data, a comparison not only with fact, but also with the best models, or samples, with some standards. Using a population survey, a survey of professionals - that is, in different ways we accumulate estimates that indicate to us the presence or absence of a problem. This is called a risk-based approach. Therefore, we will quickly come to violations. And in general, it’s more difficult for someone to hide today.

- I would like to talk with you a little about the Russian economy. Recently, the Central Bank and the Ministry of Economic Development lowered forecasts for the country's GDP growth. At the same time, as you know, you often adhere to a more restrained assessment than the Central Bank and the Ministry of Economic Development. How much do you expect the Russian economy to grow in 2019 and 2020? In your opinion, what are the main factors that are affecting Russia's GDP growth rates now? When and under what circumstances is acceleration of GDP growth possible?

- I hope we will have growth. If the global crisis does not happen, then we will have quite a bit of growth. This year it will be about 1%, maybe a little more. Of course, 1% does not even give a sufficient increase in real incomes of the population. In the first half of this year, there was a decrease in real incomes of the population, that is, the standard of living was declining. It is clear that not at all, but on average for individual groups, it still decreases.

It is necessary to carry out reforms, because it is necessary to accelerate the growth of productivity in the country. We have a very bad job growth. Even the able-bodied part of the population is reduced. This means that you need to invest in technology, management methods, organization, logistics, cheaper transportation costs, digitalization of the economy. If we do not, then our growth will not go above 2% or 3%. Our scale of this movement is still insufficient.

- Many are counting on national projects. For 2020-2022, the government will allocate 7 trillion rubles.

- National projects really solve individual problems. I even recently called it evolutionary growth, but not breakthrough. So far it is not possible to take the new bar. That is, these are good, correct measures, they improve the situation in some sectors. But so far they do not affect the economy as a whole as we would like. That's why I’ve been so critical all the time. Bearing in mind that attention should be paid to this. This is not a position, that now, nothing will work. No, this is a position - let's pay attention to this in order to move on.

- Representatives of the authorities and the expert community note a marked decrease in consumer price growth in the country. In August, the Federal State Statistics Service recorded deflation for the first time in two years. According to the Central Bank and Minek, by the end of the year inflation may drop below 4%. But many experts believe that low inflation is rather bad than good for the economy. How do you assess the inflationary situation now?

- This is a difficult question. We have such a concept - the inflation target set by the Central Bank. He just has to adhere to it. This goal is now about 4% and is recognized as the optimal value for our economy.

When, on the whole, the average growth rate is not high, and when we are going to reduce inflation a little bit - say, from 4% to 3%, then this period really is more likely to restrain growth.

Ultimately, we need both 3% and 2%, but on an ongoing basis, skillfully maintaining this level. But at the moment it is premature. And in this sense, I think that the Central Bank will calmly hold 4% or plus or minus a small amount.

But the seasonal decline in August - this, in fact, should be every year, in theory. That is, when we have a new crop - usually it just reduces overall inflation.