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International Population Statistics Reports, Series P-90, No. 23
THE SOVIET FINANCIAL SYSTEM
Structure, Operation , and Statistics
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U.S. DEPARTMENT OF COMMERCE
BUREAU OF THE CENSUS
THE SOVIET FINANCIAL SYSTEM
Structure, Operation,and Statistics
by
DanielGallik,
CestmirJesina, and
Stephen Rapawy
Foreign Demographic Analysis Division
International Population Statistics Reports slit t
Series P-90,No. 23
зауалmiw OFCOMMERCE UC..SR..DSEmiPtAhR,TSMecErNetTaryOF COMMERCE
UNITED OFAMERICA William H.Chartener, Assistant Secretary for Economic Affairs
STATES BUREAU OF THE CENSUS
A.Ross Eckler, Director
OIAVSLWONK COMMERCE
UNITEDSTASOFAMERICA
BUREAU OF THE CENSUS
A.Ross Eckler, Director
Robert F. Drury,Deputy Director
Conrad Taeuber, Associate Director
FOREIGN DEMOGRAPHIC ANALYSIS DIVISION
PaulF.Myers, Chief
Issued June 1968
Library of Congress Catalog Card No. A68-7399
SUGGESTED IDENTIFICATION
U.S. Bureau of the Census. The SovietFinancialSystem : Structure, Operation,
and Statistics, by DanielGallik, Cestmir Jesina, and Stephen Rapawy.
International Population Statistics Reports, Series P-90,No. 23.
U.S.Government Printing Office,Washington, D.C. 20402, 1968
Forsalebythe SuperintendentofDocuments,U.S.GovernmentPrintingOffice
Washington,D.C.20402,orany oftheField Officesofthe DepartmentofCommerce.Price $2.50
DEPOSITORY
PREFACE
This report is oneofa series of studies on the SovietUnion carried outby
the Foreign Demographic Analysis Division ofthe Bureau ofthe Census. Pre
pared under contract with the U.S. Arms Control and DisarmamentAgency,
the report provides a detailed description of the organization and adminis
tration of the Soviet financial system and ofthe plans, accounts, reports, and
control procedures employed, as well as the statistics produced. Particular
attention is given to the state budget, although other financialdata systemsare
also examined in detail.
The report was prepared under the general supervision ofFrederick A.
Leedy, then Chief, U.S.S.R. Branch. Daniel Gallik wasresponsible for the
conduct of research and the primary editing of the entiremanuscript. He
drafted chapters I, IV, V -A and -C, VII, VIII-C , and IX . Cestmir Jesina
drafted chapters II, V-B, VI, and X;Stephen Rapawy drafted chapters III and
VIII-A , -B, -D, and -E. The report is based onmaterials available as ofthe
end of April 1967.
Invaluable bibliographic aid and substantive advice was given by Murray
Feshbach,aswell as by Milton Gifflerandother staffassociates of theU.S.S.R.
Branch. Helpful comments were received from numerous governmental
specialists andprivate scholarswhose cooperation is gratefully acknowledged,
even though it did not prove possible to adoptallthe suggestionsmade. The
interest and patience of the U.S. Arms Control and Disarmament Agency in
seeing the project through to completion is appreciated, particularly that of
the projectmonitor,Mrs. Ruth Sivard.
Users of the report are invited to send their comments and criticismsto
the Chief, Foreign Demographic Analysis Division,U.S. Bureau ofthe Census,
Department ofCommerce Building, Washington, D.C. 20230.
III
SELECTED ABBREVIATIONS AND TERMS USED
PICAS
A.S.S.R... .Avtonomnaya sovetskaya sotsialisticheskaya respublika--Autonomous
Soviet Socialist Republic (a third-level administrative-territorial
subdivision, coordinatewith the oblast and kray--see chapter II)
СЕМА .Council for Economic Mutual Assistance (the Communist-bloc trade
organization, also known under the abbreviation CMEA, or the
acronym Comecon)
C.P.S.U.... Communist Party of the SovietUnion
FMS (or FMU). .Fabrika mekhanizirovannogo scheta (or ucheta)--Machine data proc
essing factory
FZMK . Fabrichno-zavodskoy ili mestnyy komitet--Factory-plant or local
committee (of trade union)
Gosbank . Gosuderstvennyy bank--State Bank
Gosplan .Gosudarstvennyy planovyykomitet--State Planning Committee
Gosstrakh . .Glavnoye upravleniye gosudarstvennogo strakhovaniya--Main Adminis
tration of State Insurance
Gosstroy. ..Gosudarstvennyy komitet po delam stroitelstva--State Committee for
Construction Affairs
Gostrudsberkassy. .Gosudarstvennyye trudovyyesberegatelnyyekassy--Statelabor savings
banks
GSVTs.. ..Gosudarstvennaya seť vychislitel'nykh tsentrov--State Computer
Network
GUTMO .Glavnoyeupravleniye torgovli Ministerstva oborony--Main Adminis
tration for Trade of theMinistry ofDefense
Ingosstrakh. .Upravleniyeinnostrannogo (gosudarstvennogo) strakhovaniya--Admin
istration of State Insurancefor Foreign Operations
Khozraschet .Khozyaystvennyy raschet--Economic calculation;also rendered (else
where) as economic (business, commercial, cost) accountability
(accounting, management, reckoning), self-financing, or autonomous
financing--see chapter III
Komsomol. .Kommunisticheskiy soyuzmolodezhi--The Young CommunistLeague
Kray .A third-level administrative-territorial subdivision, coordinate with
the oblast and A.S.S.R., which exists only in the R.S.F.S.R.--see
chapter II
MSB.. Mashinoschetnoye byuro--Machine data processing bureau
MSS.. . .Mashinoschetnaya stantsiya--Machine data processing station
MTS. .Mashino-traktornaya stantsiya--Machine-tractor station
NTO. . Nauchno-tekhnicheskoye obshchestvo--Scientific-technical society
Oblast .A third-level administrative-territorial subdivision, coordinate with
the A.S.S.R.and kray--see chapter II
OKS.. .Otdelkapital'nogo stroitelstva--Capital construction department(ofan
enterprise)
ORS.. Otdel rabochego snabzheniya --Workers' supply department (of an
enterprise)
Rayon. „A fourth-level administrative-territorial subdivision--see chapter II
V
VI SELECTED ABBREVIATIONS AND TERMSUSED--Continued
R.S.F.S.R... Rossiyskaya Sovetskaya Federativnaya Sotsialisticheskaya Respublika-
The Russian Soviet Federated SocialistRepublic
Sel'khoztekhnika. . Obʼyedineniye po prodazhe sel'skokhozyaystvennoy tekhniki, zapasnykh
chastey,mineral'nykh udobreniyidrugikh material'no-tekhnicheskikh
sredstv--Association for the Sale of AgriculturalEquipment, Spare
Parts, Fertilizers, and OtherMaterial-TechnicalMeans
Sotsstrakh. .Sotsial'noyestrakhovaniye--The state social insurance system
Sovnarkhoz . .Sovet narodnogo khozyaystva --Regional economic council--literally,
Council of the national (or public) economy; from 1957 through 1965,
a regional agency for administering industrial enterprisesand,until
1962, construction enterprises
Soyuzsel'khoztekhnika. .All-unionagency ofthe sel’khoztekhnika system (q.v.)
S.S.R .. . .Sovetskaya sotsialisticheskaya respublika--Soviet Socialist Republic,
the designation for each of the 15 constituent union republics,the
second -leveladministrative-territorialsubdivision of theU.S.S.R.
Stroybank . .Vsesoyuznyy bank finansirovaniya kapital'nykh vlozheniy--All-Union
Bank for FinancingCapitalInvestment
Tekhpromfinplan .Tekhniko-promyshlenno-finansovyy plan--Technical, industrial, and
financialplan of an enterprise
TSBVR... Tsentral'noye byuro vzaimnykh raschetov--Central Bureau for Mutual
Settlements
TSSU . .Tsentral'noye statisticheskoye upravleniye--CentralStatisticalAdmin
istration
Vneshtorgbank . .Bank dlya vneshney torgovli--Foreign Trade Bank
CONTENTS
Chapter Page Chapter Page
I. Introduction . . IV. Financialplansandplanning--Con.
C. Preparation of the annual eco
II. Survey of economic -administrative nomic plan and budget 49
agencies.. 5 1. Preparation of the national
A. Outline of the governmental economic plan . 50
1.sysTtheemstructure ofthe Soviet ол 2. Preparation of thebudget. 52
3. Dissemination 52
Government. 5 4. Actualperformance. 53
2. Reorganization of the
economic -administrative V. Budget categories and classifications
system , 1957-67... 6 of revenues and expenditures . 55
B. Major organs of economic
A. Typesof budgets and budget
administration and classifications 55
planning, 1957-67 11 1. Types ofbudgets. . 55
1. The SupremeEconomic
2. Revisions of the budget clas
Council... 11 sifications. 55
2. TheState Planning Committee B. The classification of revenues. 57
(Gosplan). . 11 C. The classification of
3. Economic councils expenditures.. 65
(sovnarkhozy). 14 1. Major groups and their
4. The State Committee for divisions. 67
Construction Affairs 2. Group I: nationaleconomy 69
(Gosstroy)... 19 3. Group II: socialand cultural
C. The financialsystem . 22 measures .. 71
1. TheMinistry of Finance. 22 4. Groups III and IV : defense
2. The State Bank (Gosbank). 23 and security. . 75
3. The All-Union Bank for fi 5. Groups V and VI: adminis
nancingcapital investment tration 75
(Stroybank) 26 6. Other groups (VII-X). 76
4. The Foreign Trade Bank 7. The classification ofexpendi
(Vneshtorgbank) . 29 turesby object (articles) . . 77
D. The CentralStatistical Adminis
tration (TSSU).... 29 VI. Major state revenues 85
A. The turnover tax. . 88
III. Organizationalforms offinancing . 35 1. General survey: . 88
A. Khozraschetorganizations 35 2. Source ofthe tax by sector 89
1. Basic characteristics . 35 3. Tax rates .. 90
2. Variants ofkhozraschet 4. Taxable sales in relation to
financing.. 37 allocation funds 93
3. Khozraschet in cooperative 5. Exemptions from the tax 94
organizations and collective 6. Payers ofthe tax 95
farms... 38 7. Types ofprices andmethods
B. Budget-financed institutions . 39 ofcomputingthe tax 97
C. Other formsoffinancing. 40 8. The paymentsystem 98
1. Financingadministrative 9. Allocation of the tax to the
economicagencies 40 budgets.. 100
2. Other self-supporting 10. The turnover tax and the
organizations. 41 military establishment. 101
11. Currentcontroversies con
IV. Financial plans and planning. 45 cerning the tax. 102
A. The role of finance in economic B. Profits .. 103
planning. . 45 1. Determination of profits in
B. Types offinancial plans 47 the enterprise 103
VII
VIII CONTENTS--Continued
Chapter Page Chapter Page
VI. Major state revenues--Con. VIII. Accounting and reporting procedures--Con.
2. Profitabilitymeasures. 106 B. Budgetary institutions 216
3. Origin ofprofits by economic 1. The standard classification
sector. 107 ofaccounts 217
4. The primary distribution of 2. Systemsofaccounting
profits 110 documents.. 219
5. Theprofit tax, 113 3. Accounting reports 221
6. Retained profits 116 4. The submission, review, and
7. Recent reforms.. 122 approvalofreports. 227
C. Other budgetrevenues 126 C. Gosbank. 227
1. Revenue groupings and 1. Generalaccounting and
statistics.. 126 reporting practices. 228
2. Taxes and collections from 2. Settlementand collection
the socialisteconomy.... 128 services 230
3. Taxes and collections from the 3. Enterprise groupings in short
population ... 134 term credit and settlement
D. Financialresources of khoz accounts .. 233
raschetorganizations, 139 4. Reporting on wage expendi
1. Amortization deductions. 139 ture controls 236
2. Special-purpose funds . 146 D. Finance agencies. . 237
3. Bank credit .. 148 1. Accounting procedures. 238
E. Specialmeans of budgetary 2. Reporting by finance agencies . 241
institutions... 151 3. The submission ofreports . 245
1. The sources of specialmeans. 151 E. Other systems 246
2. Special-meansestimates 153 1. Accounting and reporting in
3. Net earnings and transfer other sectors. 246
prices. 153 2. Preservation ofaccounting
4. Restrictionson expenditures. 154 documents and reports. 249
5. The significance of special 3. The centralization ofaccount
means. 155 ing and reporting 250
4. Themechanization and com
VII. Defense and other major state . puterization of data
expenditures . .. 167 processing. 251
.
A. Summary of state expenditures 167 5. Financial statistics in the
1. Consolidated state financial TsSU work plan 256
balance sheet.. 167
2. Summary state budget IX. The mechanics of financial
expenditures 167 transactions 269
B. Defense expenditures. 171 A. Budget appropriation procedures. 269
1. Soviet descriptions ofbudget B. The system ofpayments. 271
defense expenditures. 174 1. General features. . 271
2. Financialpractices in the 2. Noncash methods of
Ministry of Defense. 176 payment . 271
C. Bank statistics on the volumeand
VIII. Accounting and reporting procedures methods ofpayments 277
for financialdata... 185 1. Regularly reported
A. Khozraschet organizations 185 statistics.. 277
1. Background . 185 2. Sample survey statistics 278
2. The standard classification D. Standardization ofpayment
ofaccounts ... 187 documents.. 281
3. Systemsofaccounting
registers, 191 X. Controland audit of financial
4. Accounting reports ofprimary statistics . 287
units.. 197 A. Control and audit activities.. 287
5. Submission, review, and 1. Superior administrative
approvalofaccounting agencies . 287
reports. . 211 2. Ministry of finance 288
6. Consolidated reports of 3. The banks . 290
superior organizations. . 212 4. Other agencies.. 291
7. Effects of recentreformson 5. The effectiveness of control.. 292
accounting and reporting 215 B. The reliability of statistics. 292
