Federal Budget Program Part

According to the data of the RF Ministry for Economic Development program part of federal budget expenditures for all Federal Target Programs and Federal Targeted Investment Programs financed in 2009 was at the level of 11.5%. 

Measures of federal target programs (FTP) were financed at the rate of RUR 818.3 billion at the expense of the federal budget, i.e. they make about 8.5% of the total aggregated expenditures of the federal budget. As to the Federal targeted investment program (FTIP) the volume of financing of construction sights, objects and measures, including the financing of design and exploration works but excluding the construction sights and objects of the state defense order was equal to RUR 488.6 billion, and the FTIP program part made only RUR 291.3 billion of the amount mentioned. 

Despite the chaotic implementation of the result-oriented budget methods into the state finance management at the federal level it is obvious that in prospect the biggest part of budget expenditures will be carried out within the framework of budget targeted programs having clear quantitative productivity indices. At the same time this should not result in emergence of unconnected program documents chain which is observed in the Russian practice for budget planning. 

Originally the program approach was implemented in Russia as far back as 1995 when FTP was established legislatively and was aimed at carrying out large-scale investment, scientific and technological and (or) structural projects to solve problems either belonging to the authority of several federal government bodies or having national significance. Starting with 2005 together with federal targeted programs departmental targeted programs that are complexes of interconnected measures aimed at solution of a particular tactical task faced by the chief superintendant of budget funds. In 2007 the system of the used targeted programs was once again reconsidered by introducing new version of article 179 of the RF Budget Code, which establishes the general issues connected with the adoption of long-term target programs (LTP) and financing of their monitoring. It should be noted that the attempt to clarify the place of LTP within the framework of the target program approach to budget funds managing was fulfilled only in the project of the RF Government Program for optimization and efficiency increase of budgetary expenditures (further referred to as the Program) management, which should be approved by April 1, 2010.

According to the Program, the content of the DTP, their expected results and budget assignments will be planned on the basis of LTP. It is the federal ministries that are responsible for the development and fulfillment of the LTP at the federal level, and each federal ministry should form one or several long-term target programs and the executive federal bodies belonging to their authority should, in their turn, have at least one DTP. It is also suggested transforming existing FTP into DTP in order to increase the budget system stability, efficiency and simplification of the implementation of the program and targeted planning.

However, cancelling FTP and making the ministries responsible for LTP the government bodies deprive themselves of an instrument to solve the interdepartmental problems. There is no doubt that it is low level of control over the program that is the drawback of FTP. In fact, FTP should be coordinated by the major customer (one of the program’s executors), which is responsible not only for the organization of coordination between all the departments that execute the program but also for the achievement of the results in the program as a whole. The disadvantage of such an approach consists in the disparity with the interdepartmental nature of the program, which assumes that all the participating executors have joint responsibility and the chief executor have the status equal to other customers and does not have a possibility to control their operations. The obvious possibility to make only the chief superintendant of budget funds responsible for the actions of others means in fact that there is no one responsible for the execution of the program as a whole.

However the drift from the interdepartmental coordination cannot solve all the problems in improving the quality of budget planning. Theoretically the projects of realization of the Main directions of action of the RF Government for the period of up to 2012 (MDAG) can be authorized with interdepartmental coordination, but the mechanisms for their fulfillment have not been elaborated so far and the project of the Program does not mention the connection with DTP. In our opinion, it is program projecting module that should provide the coordination between the MDAG, Reports on results and main directions of the operation of the budget planning subject on the one hand and the justification of budget assignments and federal law on  budget on the other.

Sokolov I.A. – PhD, Head of the Department of Budget Policy