Russian Cinema Fund Accused of Misspending State Money

The agency, which provides cash to Russian filmmakers, denies the accusations covering $8.4 million.

MOSCOW – Russia’s Financial Control Service has claimed that $8.4 million (277 million rubles) in subsidies to filmmakers by the country's Cinema Fund last year were misspent or misreported.

The fund denied the accusations, saying errors and circumstances beyond its control led to the irregularities.

Based on an audit that covered the activities of the fund, one of Russia’s two agencies in charge of providing state cash to filmmakers, between Oct. 2011 and Dec. 2012, the Financial Control Service said fund reports on spending 247 million rubles were false, while another 30 million rubles were spent on a film that didn’t get made.

The feature film Skobelev, a biopic about the 19th century Russian general Mikhail Skobelev, was supposed to be made as a co-production between Russia and Bulgaria, and, in accordance with a signed agreement, was to be completed in 2012.

The Cinema Fund responded to the controlling agency’s claim by saying that Skobelev wasn’t completed due to “force majeure” circumstances – or circumstances beyond control – and that the cash the fund had spent on the production was not misappropriated. Similarly, the fund cited genuine reporting errors that the agency was willing to correct rather than a deliberate attempt to embezzle or misuse any of the other funds cited by the Financial Control Service.

In late 2012, another Russian financial controlling body, the Audit Chamber, accused the Cinema Fund of “ineffectiveness,” which indirectly led to a shift in power over government funding for the film sector from the fund to the culture ministry.