The issue of liquidation of the redundant functions at disposal of the federal government bodies have not been resolved. The work of the Government commission on the Administrative Reform formed in ac cordance with the Decree of the RF Government of July 31, 2003, No. 452, resulted in the analysis of over 5,000 functions pursued by the federal government bodies. Half of those functions were considered fully or partly redundant. However, only a small number of them, which were written in the decrees of the RF Government and regulations on departments, were abolished. The majority of redundant functions writ ten in the federal laws and in the edicts of the President of the Russian federation and acts adopted by the RF Government still remain (over 300 laws, scores of presidential edicts and hundreds of Government Decrees and departmental acts).
3. Priority venues for the development of performance based budgeting arrangements Along with the order of development, approval and implementation of departmental target programs and procedures of the medium term budget planning among the most important venues of improving per formance based budgeting arrangement are:
Development of the institute of consolidated reports on the out come and main directions of the RF Government’s activity;
Development of the institute of the civil service contract, which en visages introduction of the civil servant performance indicators and dependence of his pay on the his/her performance results;
Development of the system of statistical and ideological investiga tions directed to guaranteeing the efficient monitoring of executive bodies performance efficiency and budget programs implemented by them;
Formation of the mechanisms for motivation of training and meth odological assistance of transition to the performance based budgeting.
Below we will examine in detail enumerated venues for the improve ment of the performance based budgeting.
1. Development of the Institute of Consolidated Report on the Results and Main Directions of Activity of the Government of the Russian Federation Efficient implementation of the government policy in the sphere of public expenditure requires effective interdepartmental coordination measures even in the sphere of the budget target programs implemen tation. Moreover, available mechanisms of budget planning in Russia do not envisage yet effective interdepartmental coordination of public expenditures aimed at achieving one goal outside the institute of the federal target programs). In accordance with the Concept of the budget process reforming in the Russian Federation in 2004–2006 the number of federal target programs should be considerably cut, including through their reorganization into departmental target programs.
Consolidated reports on the outcome and main directions of the ac tivity of the RF Government should become an efficient instrument of coordinating departmental target programs. The RF Government De cree of 23 December 2004, No. 838 formally introduced the institute of the consolidated report. The first version of the consolidated report prepared in August 2004 could not provide such coordination because it was limited to the enumeration of main Government performance in dicators, goals, objectives and performance indicators of the subjects of budget planning. It did not describe interdepartmental tasks.
In February 2005 the RF Ministry for Economic Development and Trade presented to the Government a draft Decree “On the Order of Development of Consolidated Reports on the outcome and Main direc tions of Performance of the Government of the Russian Federation”.
Draft Decree, which is being developed by the RF Ministry for Eco nomic Development and Trade, envisages the following structure for the consolidated report:
1. Outcome of the goals achieved by the Government of the Russian Federation and the subjects of budget planning in the reporting period.
2. Goals set for both the Government of the Russian Federation and for the subject of budget planning for the planning period.
3. Complex of projected measures and measures under implemen tation aimed at achieving set goals.
4. Regional aspects of the goals of the Government of the Russian Federation.
5. Scenarios of Russia’s economy performance for the planning pe riod.
6. The most important risks in the way of set goals.
In the first section – “Results of the goals achieved by the Govern ment of the Russian Federation and the subjects of budget planning in the reporting period” – each of the Government’s goals must include:
Comparison between the projected and achieved indicators’ val ues, which characterize the RF Government’s performance and the performance of the subjects of budget planning in the report ing period;
Analysis of the reasons, which explained achieved indicators’ val ues’ departure from the projected ones;
On the basis of the conducted analysis they draw conclusions to the need of:
Adjustment of the indicators composition, which characterize the RF Government’s performance and the performance of the sub jects of budget planning regarding achievement of the goals as well as achievement of their digital values;
Introduction of amendments in the valid normative legal acts, which regulate expenditure liabilities in the Russian Federation;
Change in the distribution of the federal budget funds between the subjects of budget planning and between subordinate to the sub jects of budget planning principal budgetary managers taking into account evaluation results of the valid liabilities;
Adjustment in the composition of departmental and federal target programs as well as contents of measures, which were not in cluded in departmental and federal target programs;
Redistribution of responsibility between the subjects of budget planning in the process of realization of goals by the RF Govern ment and fulfillment of interdepartmental objectives.
In the second chapter – “Goals set for both the Government of the Russian Federation and for the subject of budget planning for the plan ning period” – a brief description of Government’s goals, composition and projected indicators’ values for achieving these goals in the plan ning period, division of responsibility between the subjects of budget planning for their fulfillment should be provided. That chapter also pro vides correlation between the goals and tasks of the subjects of budg etary planning and the goals of the RF Government and tasks of the subjects of budget planning as well as projected values of indicators designed for their achievement.
For each Government’s goal by principal groups should be provided:
brief description; projected values of indicators designed for goal achievement for each year of the planning period; characteristics of goals and objectives of the subjects of budget planning regarding this Government’s goal as well as projected values for indicators designed for their achievement.
In the third chapter – “Complex of projected measures and meas ures under implementation aimed at achieving set goals” the following subsections should remain:
“Activity of the subjects of budget planning aimed at achieving goals of the RF Government”.
“Planned institutional reforms”, which include description of the reforms envisaged by the President’s message to the Federal As sembly of the Russian Federation, Program of socio economic de velopment of the Russian Federation on a medium term perspec tive.
“Planned infrastructure projects and development projects for in dividual sectors of the economy.” For each of the subsections there should be provided a list of nor mative legal acts mentioning their brief contents, principal execu tives, dates for the draft normative legal acts to be submitted for review to the RF Government, State Duma, adoption of the norma tive legal acts by the RF Government or federal executive body.
List of departmental and federal target programs with indicating the period for their implementation, projected indicators’ values, which characterize their implementation.
Principal course of action of the subjects of budget planning, which were not included in departmental and federal target pro grams with indication of the date and/or consistency of their reali zation, projected indicators’ values, which characterize their im plementation.
Description of population groups and economic subjects, whose interests are involved in the projected restructuring, including quantitative evaluation of appearing costs and advantages, com pensation mechanisms and arrangements for levelling of negative consequences, cost evaluation.
In the fourth chapter “Regional aspects of the goals of the Gov ernment of the Russian Federation” each Government’s goal should be provided with.
Justification for studying given goal across the subjects of the Rus sian Federation.
Projected indicators’ values across the subjects of the Russian Federation in the planning period.
List of departmental and federal target programs as well as princi pal measures of the subjects of budget planning by the RF sub jects, which were not included into departmental and federal tar get programs of the subjects of budget planning.
The fifth section “Scenarios of Russia’s economy performance for the planning period” should contain:
Characteristics of external and internal factors and conditions of the socio economic development of the country;
Base (inertial) and target forecast of the principal indicators for the development of the economy and the social sphere for the coming period;
Resource constraints existing for the development of the economy and the social sphere in the planned period (labour, investment, fi nancial, etc.).
The sixth section “The most important risks in the way of set goals” should contain qualitative and quantitative description of main factors, which can become a reason for nonfulfillment of projected indices of goals realization by the RF Government and analysis of possible venues for minimizing the influence of these factors.
Analysis of the influence of principal risks during the planned period is conducted along the following groups:
Risks of changes in the development external conditions;
Risks of departure of actual indicators’ values, which characterize internal processes and factors, from the projected ones;
Risk connected with the change of required volumes of resources in comparison with the projected ones;
Risks connected with not meeting the dates or insufficient amount of required resources;
Each risk should be subject to: evaluation of probability of its realiza tion, analysis of the consequences of its realization, measures aimed at cutting negative consequences of its realization.
In the whole, adoption of this draft order for the development of con solidated report should contribute to the improvement of quality of the document due to detalization of requirements set to its content regard ing risks evaluation, definition of interdepartmental goals and objectives connected with the relations with the RF subjects. Moreover, corre sponding detalization and widening of requirements set to the contents of the reports on the results and main performance directions of the subjects of the Russian federation is envisaged.
Moreover, some provisions of the debated draft are considered dis putable and require additional detalization. For example, correlation between the consolidated reports on the outcome and main perform ance directions of the Government of the Russian federation and the program of socio economic development of the Russian Federation is not quite clear. The latter is envisaged to remain as an instrument for the budget planning107. Considering that these documents describe the program of actions of the Government for medium term perspective, they can either duplicate each other or in case different bodies will con duct their development they will contradict each other. In the first case their coexistence is unnecessary. In the second case – it will be detri mental because contradictions between them will result in dithering of goals and objectives of the government policy. We think that the Con solidated report should replace the program of socio economic devel opment of the Russian federation for medium term perspective. The latter does not exclude the existence of a separate document, which describes the development program for a long term perspective (for instance, ten years).
Besides these two documents medium term planning is conducted by way of the development of the Strategy for the development of dif ferent branches (with their own set of “strategic” indices). For example, the Strategy of the Russian Federation in the sphere of the develop ment of science and innovations for the period till 2010, the Strategy of the Russian Federation in the sphere of education for a period till 2007, etc. are adopted at present. Development of such branch wise strate gies along with the budget reports drafted by the subjects of the budget planning is partly explained by the shortcomings in the methodology of their preparation. The budget report includes only those goals and ob jectives, which realisation factor can be monitored on the available sta tistical basis. Due to this fact existing and determined trends are actu ally included in the future development. Strategic goals can not be de termined at the level of indices.
At present, the need to develop the program of socio economic development of the Russian Federation for medium term perspective is envisaged by the Federal Law “On Government Forecast and Programs of Socio Economic Development of the Russian Federation” of 20 July 1995, No. 115 FZ.
That is why there appear branch wise development strategies de veloped on a different methodological basis. As a result, action plans of some subjects of budget planning are simultaneously described by three documents: branch wise strategies, corresponding sections in the Program of socio economic development of the Russian Federation for medium term perspective (2005–2008) and budget reports. These three documents are based on different methodological schemes and on different system of resulting indices. However, often they developed for the same period of time.