2. Read the dialogue, sum up its content and act it out:

Foreigner: As far as I know, when you started your economic reforms some people believed that under market conditions the controlling function of the state would be losing its importance. Has this idea proved to be true?

Russian: It's clear now that the idea was erroneous. Results of audits and inspections reveal lots of branches of the tax law, misuses of public money, misappropriations and numerous cases of budget funds squandering.

F.: How can you account for so numerous financial infringements in Russia now?

R.: The situation we are having now is a consequence of a weak legal base, shortcomings in running the country's finances, absence of a legal base for an active financial control.

F.: What infringements are most frequent?

R.: Well, first of all, I would single out diverting of money away from the stated purposes into lucrative deals for personal gain. I mean funds allocated as returnable resources and budget resources allocated as the state support for different branches of economy. Then I would mention transfer of state funds to commercial units, embezzlements. Defalcations, and misappropriation of funds.

F.: We have heard about scandals in your country when managers illegally placed so called "free money" in commercial banks and used the profit made to satisfy their own needs, like buying cars and real estate, going abroad on holiday an so on.

R.: That's true. In some cases, managers underreport their taxable profit, do not disclose income in accounting documents, start business operations without licenses, avoid paying excise duties, etc. There is no legally established responsibility for the misuse of budget funds, which causes irresponsibility, wastefulness, and criminal actions on the part of senior officials and managers. Do you have similar problems?

F.: Well, yes, we have, but on a smaller scale. There is an efficient system of government auditing in our country. We examine accounting and performance of all government agencies and public corporations. What are the functions of government auditing in Russia?

R.: Generally, we focus on compliance of government agencies, juridical persons with financial legislation of the Russian Federation, we audit execution of the federal budget and extrabudget funds, control money circulation, use of credit resources, external and internal state debt, state reserves, safe keeping and use of state property. We are also responsible for many other things.

F.: What measures do you take when you detect financial misneeds? Do you hand your reports to investigating authorities?

R.: Yes, we do. Investigating authorities institute proceedings on the basis of our reports. We must work to improve the system of financial control in Russia because it does not fully meet the present-day requirements.

F.: You mean the vigorous emergence of the private sector?

R.: Yes, the development of market relations and public and private finances.

Words you may need:

squandering проматывание (средств)

infringement нарушение (законов)

wastefulness расточительность

investigating authorities следственные органы

to institute proceedings начинать судебное разбирательство

Exercise 9.