Forms and types of financial control in the field of procurement of goods, works and services to meet state and municipal needs

Fedchenko Kristina Igorevna Postgraduate Student, Department of Legal Regulation of Economics and Finance, Institute of Public Administration and Management, Russian Academy of National Economy and Public Administration under the President of the Russian Federation 119571, Russia, Moscow, 82 Vernadsky Ave. k.fedchenko0223@gmail.com Other publications by this author

Introduction

Relevance. The legal regulation of finance is closely connected with the procurement of goods, works and services to meet state and municipal needs. Thus, from a financial and legal point of view, the contract system can be considered as a set of closely related legal norms regulating homogeneous public relations related to the implementation of public expenditures in order to meet state and municipal needs through a system of procurement of goods, works and services at the expense of monetary funds of the state and municipalities ^[1].

Thus, the implementation of financial control in the field of procurement of goods, works and services to meet public needs is directly related, on the one hand, to ensuring the effectiveness of public spending of funds of the state and municipalities, and, on the other hand, with the proper satisfaction of state and municipal needs.

Both of these aspects are of particular importance today, since they are directly related to ensuring the efficiency of the domestic economy in the face of unprecedented sanctions pressure from unfriendly countries, as well as with the intensification of economic growth in the context of economic "mobilization".

The object of the study was the public relations that develop in connection with and regarding the implementation of financial control in the field of procurement. The subject of the study was the provisions of the current legislation on the contract system and financial legislation, which enshrine the norms on the implementation of financial control in the field of procurement. An additional subject of the study was the materials of judicial practice and the results of published academic research.

The purpose of the article is to identify the key types and forms of financial control directly in the field of procurement, based on theoretical concepts and general legislative provisions on financial control, on the one hand, and control in the field of procurement, on the other hand. To achieve this goal, the article consistently analyzes: 1) key doctrinal approaches to understanding financial control in the field of procurement, 2) features of direct financial control in the field of procurement; 3) features of indirect (secondary) financial control in the field of procurement.

Research methods include general scientific and special scientific methods. The general scientific research methods used in the article are presented by: analysis, synthesis, induction, deduction, and the systematic method. Special scientific methods include: the formal legal method, the method of analyzing judicial practice, the method of system-functional analysis of law, the method of analyzing doctrinal sources.

The scientific novelty of the research consists in the development and substantiation of the author's approach to the systematization of key types of financial control in the field of procurement.

Literature review. The concept and content of financial control in the field of procurement

E.Y. Gracheva, analyzing the evolution of domestic financial legislation in the pre-revolutionary period, notes that initially there was no allocation of independent types of control in the latter. In particular, an independent type of control over public procurement was not isolated ^[2]. Similarly, today, assessing financial control in the aspect of managing budget expenditures to meet public needs, T.A. Vershilo points out that this area of public administration and law enforcement activities is not endowed with sufficient autonomy ^[3].

Thus, in the modern domestic financial and legal doctrine, there is no stable understanding of financial control in the field of procurement as an independent type of state financial control with its own tasks, goals, functions and tools. Among other things, there is also insufficient autonomy for control over public procurement activities as an area where budget funds are disposed of and spent.

Nevertheless, in terms of legislative regulation of financial control over procurement activities, Chapter 5 of Federal Law No. 44-FZ dated 04/05/2013 "On the contract System in the field of Procurement of Goods, Works, services for State and Municipal Needs" (hereinafter also Law No. 44–FZ) is in force today, which is directly devoted to control in in the field of procurement and, thus, acts as a key regulatory prerequisite for the allocation of (financial) control in the field of procurement as an independent category.

The validity of the allocation of financial control in the field of procurement is also noted in modern research. In particular, V.A. Yudin identifies the following as special characteristics of financial control in the field of public administration, control and supervision in the field of public procurement: organizational independence; functional independence; financial independence. As V.A. Yudin notes, these properties of public administration in the field of public procurement ensure the solution of such tasks as transparency and reliability of the results of control measures. At the same time, such regulation should ensure that there is no duplication of managerial functions on the part of executive bodies ^{[4, p. 101]}.

The purpose of financial control in the field of procurement is to comply with the process of execution and budgeting of the budget system of the Russian Federation, as well as the reliability of accounting and the effectiveness of expenditures in procurement. Thus, the purpose of financial control within the framework of the contract system is the general purpose of financial control, by which E.Y. Gracheva understands "compliance with the rule of law at all stages of the budget process for the effective performance by the state and municipalities of their functions and tasks" ^{[5, p. 114]}.

Accordingly, the nature of the implementation of the tasks of state control over the financial activities of public entities especially manifests itself in terms of budget regulation of the fulfillment of state and municipal contractual obligations. In this regard, E. A. Istomina reasonably defines financial control in the field of procurement as "a set of economic relations arising between a control body, on the one hand, and a subject of public procurement, on the other, regarding ensuring the efficient use of budgetary financial resources, compliance with their targeted nature of use, as well as savings" ^{[6, c. 82]}.

At the same time, E. A. Istomina distinguishes financial control of public procurement as an element of a more general system of control of public procurement in general ^{[6, p. 83]}, which seems to us quite justified, given the administrative control activities of the Federal Antimonopoly Service of the Russian Federation (hereinafter - the FAS of Russia), which carries out financial control in the field of procurement only indirectly (so-called secondary financial control).

Thus, financial control in the field of procurement is both a direction of general financial control (direct financial control in the field of procurement) and a direction of general control in the field of procurement (indirect financial control in the field of procurement).

Direct financial control in the field of procurement

The body exercising direct financial control in the field of public procurement at the federal level is the Federal Treasury. Also, the subjects of direct financial control in the field of procurement (based on the provisions of paragraph 2, Part 1, Article 99 of Law No. 44-FZ) may include financial authorities of the subjects of the Russian Federation (at the regional level) and municipalities (at the municipal level), management bodies of state extra-budgetary funds.

The first type of direct financial control is carried out by the Federal Treasury (as well as other bodies specified in paragraph 2 of Part 1 of Article 99 of Law No. 44-FZ) in accordance with the procedure provided for in Part 5 of Article 99 of Law No. 44-FZ, as part of the implementation of law enforcement functions for treasury budget execution.

In accordance with the provisions of Part 5 of Article 99 of Law No. 44-FZ, the Federal Treasury (and other specified bodies) exercises control over: 1) failure to exceed the amount of financial security included in the schedules over the amount of financial security for procurement approved and communicated to the customer; 2) compliance of information on procurement identification codes and failure to exceed the amount of financial security for the implementation of these purchases contained in information and documents not subject to posting in the EIS. The procedure for exercising control in accordance with Part 5 of Article 99 of Law No. 44-FZ is determined by a special Decree of the Government of the Russian Federation dated 08/06/2020 No. 1193 (as amended on 10/31/2022) "On the procedure for exercising control provided for in Parts 5 and 5.1 of Article 99 of the Federal Law "On the Contract System in the Field of Procurement of Goods, Works, Services to Ensure Public and municipal needs", and on the amendment and invalidation of certain acts of the Government of the Russian Federation."

This area of control activity of the Federal Treasury (and other noted bodies) in the field of procurement for public needs can be conditionally attributed to the current ^[7] direct financial control. As part of this control, the Federal Treasury conducts inspections of schedule plans, procurement notices, protocols for determining suppliers, and terms of draft contracts for non-excess of the contract price over the amount of financial security provided for procurement and compliance with procurement identification codes.

The implementation of current direct financial control is carried out on the basis of the use of a Unified information system in the field of procurement. In general, the corresponding type of control is almost completely digitized (the exception here is the control over certain types of purchases of goods, works and services from a single supplier – pp. 4, 5, 23, 42, 44, 45, 46 and 52 part 1 of Article 93 of Law No. 44-FZ). As part of the implementation of the relevant control powers of the Federal Treasury (and other bodies of current direct financial control), customers are required to send information and documents subject to control to the personal accounts of the controller in the EIS in accordance with the provisions of Article 99 of Law No. 44-FZ and Decree of the Government of the Russian Federation dated 08/06/2020 No. 1193.

In addition, with a certain degree of conditionality, the powers of the Federal Treasury to maintain a register of contracts concluded by customers can also be attributed to current financial control (Part 1 of Article 103 of Law No. 44-FZ). Maintaining these registers is also a form of accounting and control in the contract system.

The second type of direct financial control is implemented by the Federal Treasury in accordance with Parts 8 and Part 9 of Article 99 of Law No. 44-FZ within the framework of the internal state financial control system.

Also, the relevant control activities are carried out by other bodies of internal state (municipal) financial control, which, within their competence, monitor compliance with the requirements: rationing within the framework of the contract system, determining the NMCC, contract execution, changing the terms of contracts, compliance of the purchase with the objectives of its implementation, etc. The relevant control is carried out in accordance with the procedure established by budget legislation, and as its purpose is aimed at ensuring the legality of the preparation and execution of expenditure items of budgets in the field of procurement.

This type of direct financial control within the framework of the contract system, implemented by the Federal Treasury (and other internal financial control bodies), can be conditionally designated as subsequent. The main form of subsequent direct financial control is scheduled and unscheduled on-site and desk inspections, which indicates that control is carried out ex post.

It is carried out in relation to compliance with the requirements of rationing, justification of the initial (minimum) contract price and execution of contracts that are concluded by federal customers and regional/municipal customers using federal budget funds. In addition, this type of direct financial control also ensures that the use of the supplied goods meets the procurement objectives.

Thus, in aggregate, the current and subsequent forms of direct financial control implemented by the Federal Treasury (and other bodies specified in the relevant parts of Article 99 of Law No. 44-FZ) are subject to application at all stages of procurement activities ^[8]:

1. As part of the planning of purchases of goods, works and services to meet state needs, treasury control is carried out in accordance with Part 5 of Article 99 of Law No. 44-FZ, according to which the Federal Treasury bodies (and other authorized bodies), carrying out treasury services to the customer, monitor compliance with the amounts of funds specified in the plans-procurement schedules, the amount of budget funds brought to the customer.

2. At the stage of procurement, both current and subsequent control is carried out. Control in accordance with Part 5 of Article 99 of Law No. 44-FZ is carried out by the Federal Treasury also in the order of treasury services for federal customers and regional/municipal customers making purchases at the expense of the federal budget (for example, in terms of controlling non-exceeding the maximum amount of the advance specified in the notice of procurement, invitation to participate in the purchase or in a draft contract sent to the supplier without using the EIS – paragraph. "d" item 11 of the Decree of the Government of the Russian Federation dated 08/06/2020 No. 1193). On the basis of Part 8 of Article 99 of Law No. 44-FZ, at the stage of procurement, control is exercised over non-compliance with the NMCC, as well as over compliance with the rules of rationing established in Article 19 of Law No. 44-FZ.

3. At the stage of contract execution, current control (in accordance with Part 5 of Article 99 of Law No. 44-FZ) by the Federal Treasury is carried out with respect to information contained in the register of Contracts containing state Secrets (Decree of the Government of the Russian Federation dated 11/28/2013 No. 1084 (ed. dated 12/29/2022) "On the procedure for maintaining the Register of Contracts containing State Secrets information constituting a state secret"). But the main form of control at the stage of contract execution is subsequent control, within which the Federal Treasury ensures scheduled and unscheduled inspections: contract execution; compliance with its terms; changes in contract terms; acceptance of goods, works and services; application of measures of property contractual liability; timely fulfillment of monetary obligations and compliance with the use of delivered goods for procurement purposes (paragraphs 5, 6, part 8 of Article 99 of Law No. 44-FZ).

Indirect (secondary) financial control in the field of procurement

The federal executive authority exercising control in the field of procurement, as well as the control body in the field of state defense orders, is the Federal Antimonopoly Service of the Russian Federation (FAS of Russia) (Decree of the Government of the Russian Federation dated 08/26/2013 No. 728 (ed. dated 04/14/2017) "On determining the powers of Federal executive authorities in the field of procurement of goods, works, services for provision of state and municipal needs and on amendments to certain acts of the Government of the Russian Federation"). At the level of subjects, the relevant control bodies are established in accordance with regional legislation (paragraph 3.1. of Article 99 of Law No. 44-FZ) (see, for example, Decree of the Government of Moscow dated 04/25/2012 No. 193-PP "On the establishment of the Main Control Directorate of the City of Moscow").

Exercising control functions in the field of public procurement, the FAS of Russia, as well as regional control bodies in the field of procurement, check the activities of customers, their contract services, contract managers, authorized bodies (institutions), specialized organizations, as well as operators of electronic platforms (including specialized ones) in terms of compliance of their actions with the requirements of procurement legislation for government needs.

At the same time, the Federal Antimonopoly Service of Russia (as well as regional government authorities with control powers in the field of procurement), while ensuring control over compliance with the requirements of the legislation on the contract system, inevitably exercises control over compliance with the provisions of budget legislation (the requirements of which must be observed by state customers controlled by the Federal Antimonopoly Service of Russia). Thus, in particular, by eliminating cases of collusion during bidding, the FAS of Russia directly prevents an increase in budget expenditures under a specific contract, ensuring real competition between potential suppliers ^[9]. Similarly, the situation of cancellation of the results of tenders conducted in violation of the requirements of the legislation on the contract system is directly related to financial and legal relations, as a result of which state customers must form new applications for the purchase of goods, works and services on modified terms ^{[4, p. 77]}.

In the context of such a role of the Federal Antimonopoly Service of Russia (as well as those endowed with control powers in the field of procurement of regional government authorities), a natural question arises about the attribution of the relevant entities to the subjects of financial and control relations that develop within the framework of the contract system.

It seems that, taking into account the importance of the profile activity of the FAS of Russia for optimizing budget expenditures of all budgets of the Russian Federation, it may well be attributed to secondary (indirect) financial control bodies that exercise appropriate control powers in the financial sphere within the framework of more general powers (unlike specialized direct financial control bodies, for which its implementation is the main authority ^[10]). In other words, the FAS of Russia should be perceived as a participant in the contract system with an indirect financial and legal status.

At the same time, it is important to emphasize that the FAS of Russia exercises financial control in the field of procurement only in connection with the execution of its direct (special) control powers. Due to its legal status, the FAS of Russia cannot exercise financial control, conduct specialized financial audits, and impose penalties for financial violations. The implementation of all the noted financial and control powers is carried out by the FAS within the framework of the implementation of its main powers. At the same time, it is worth noting that in some cases such subsidiary performance by the FAS of Russia of functions in the field of financial control may be qualified by the courts as an excess of authority with the cancellation of decisions made by the FAS of Russia (see, for example, Decision of the Supreme Court of the Russian Federation of August 22, 2016 No. AKPI16-574; Appeal Ruling of the Supreme Court of the Russian Federation of November 14, 2017 No.APL17-373).

It is also worth noting that the Prosecutor's office can be singled out as a body of general control and supervisory competence that oversees public procurement.

The execution of the relevant powers is carried out by the Prosecutor's Office within the framework of general supervision of the implementation of legislation outside the criminal law sphere in accordance with the provisions of Articles 21-25.1 of Federal Law No. 2202-1 of 17.01.1992 (as amended on 07/24/2023) "On the Prosecutor's Office of the Russian Federation". Particular attention is paid to the sphere of public procurement within the framework of general prosecutor's supervision, in particular, at the level of special Order of the Prosecutor General's Office of the Russian Federation dated 14.01.2021 No. 6 (ed. from 05.05.2023) "On the organization of prosecutor's supervision over the implementation of legislation in the field of procurement."

In general, the supervisory activities of the prosecutor's office in the field of public procurement really contribute to the proper implementation of budget legislation and, accordingly, the proper expenditure of budget funds ^[11]. In particular, in 2022, as part of the general prosecutor's supervision, 122,000 violations of laws in the budgetary sphere were revealed. In 2021, the same indicator amounted to 118,000 (Statistical data on the main indicators of the activities of the Prosecutor's Office of the Russian Federation for January-December 2022 // Prosecutor General's Office of the Russian Federation. February 14, 2023 URL: https://epp.genproc.gov.ru/web/gprf/activity/statistics/office/result?item=85327980 ). Thus, from the point of view of control over the proper expenditure of budgetary funds in the field of public procurement, the activities of the prosecutor's office can be assessed as quite effective.

However, it is important to note that the Prosecutor's Office oversees the implementation of laws within the framework of public procurement as part of the general prosecutor's supervision of legality. Moreover, financial and budgetary supervision in the relevant area is not directly implemented by the Prosecutor's office, but indirectly through the implementation of general prosecutorial powers. Thus, the prosecutor's office here acts as a supervisory authority of general competence and cannot be directly qualified as an authority (even indirectly) of financial control in the field of procurement. It is a general supervisory body.

Conclusions

The legal mechanism for the implementation of financial control within the framework of the contract system is quite highly branched.

It includes two key forms:

1) indirect (secondary) financial control carried out by the Federal Antimonopoly Service of Russia (as well as by the control bodies of subjects established in accordance with regional legislation) within the framework of the execution of its general control powers in the field of procurement and the state defense order;

2) direct financial control, which is carried out by the Federal Treasury, as well as by the financial bodies of subjects/municipalities and the management bodies of extra-budgetary funds.

At the same time, direct financial control within the framework of the contract system is implemented in two types:

2.1) current control – within the framework of the implementation of law enforcement functions for treasury services for the execution of budgets of the budgetary system of the Russian Federation (in accordance with the procedure provided for in Parts 5 and Part 5.1 of Article 99 of Law No. 44-FZ);

2.2) subsequent control – within the framework of the system of internal state (municipal) financial control (in accordance with the procedure provided for in Parts 8 and Part 9 of Article 99 of Law No. 44-FZ).