It leads not so mush (or will lead) to the differences in decision tak ing as undermines their importance and status of each of the men tioned documents because mechanisms required for their coordination and subordination are not thought of. One of the options for resolution of this issue can become longer periods for branch wise strategies, which should set the development framework (set goals) for a consid erably longer period in comparison with the budget reports drafted by the ministries.
As was mentioned above the consolidated report should include a chapter “Regional aspects for achieving goals of the Government of the Russian Federation,” which contents are insufficiently described in the draft in order to understand to which extent and on what basis it is planned to involve the regions into the implementation of the federal government strategy. One of the aspects of this issue, which was dis cussed during the development of the draft document, consists in the fact that goals and objectives set by the federal government must di rectly be subject to the implementation on the subnational level.
Article 77 of the Constitution can serve as a legal basis for such posi tion. According to this Article within the jurisdiction of the Russian Fed eration and its powers on mutual jurisdiction federal executive bodies and government bodies of the constituent members of the Russian Federation form a single system of executive government. Moreover, we think that it would be incorrect to interpret this provision in the sense that the Federation has the right unilaterally devolve to the regional government bodies functions of its agents.
The idea of 2003–2004 reform of the division of powers between the Russian Federation, its constituent members and local authorities con sists in the fact that each level of government independently executes its powers. On the one hand, it means that the Federation has no right to interfere in the jurisdiction of the subjects of the Russian Federation, and on the other hand, its exclusive powers or jurisdiction on mutual powers it should carry out first of all through the federal government bodies. Devolution of such powers to regional government bodies is allowable only on condition of their funding from the federal budget.
According to Item 8, Article 26.3 of the Federal law “On General Principles of Organization of Legislative (Representative) and Executive Bodies of State Power in the Subjects of the Russian Federation” devo lution of the powers of the Russian Federation of the constituent mem bers may not be accompanied by financing from the federal budget only in case when these “powers do not envisage the need for creating new bodies of the state power in the subject of the Russian Federation, public institutions in the subject of the Russian Federation and public unitary enterprises in the subject of the Russian Federation as well as additional public investments, payments from the budget of a subject of the Russian Federation to citizens and legal entities, increase in per sonnel of civil servants in a subject of the Russian Federation and em ployees in public institutions in a subject of the Russian Federation.” Thereby, we think that the chapter of the Consolidated report dedi cated to the regional aspects of achieving goals of the Government of the Russian Federation cannot envisage compulsory assignments for the regional government bodies. This chapter can include either coor dinated with the regional authorities mutual programs, or division of re sponsibilities for the implementation of the federal programs between the territorial representations of the federal government bodies.
When they were working on the draft of the order of development of the Consolidated report they removed from the draft a norm, which en visaged a rating evaluation of the financial management performance of the subjects of budget planning during the reported period and proce dure for determining the volume of jurisdiction and responsibility of each subject of budget planning in the sphere of financial management as a result of such evaluation. Under “procedure for determining the volume of jurisdiction and responsibility in the sphere of financial man agement” we understand redistribution of allocations between depart mental budgets and granting to the subjects of budget planning, which received high marks regarding financial management performance, greater freedom in redistributing funds inside departmental budgets.
Although theoretically performance based budgeting envisages co ordination of financing with the evaluation of the expenditure efficiency, we think that at the present stage of reform such coordination would have been premature. In the lack of adequate criteria of the evaluation of performance results of the subjects of budget planning and under standing of which level of costs incurred on achieving these results can be considered economically justifiable, liquidation of control over their expenditure can results in the public expenditure growth. Achievement of the set goals does not signify that these goals could not have been achieved at less cost, which means that there are no grounds to aban don control over costs justification.
2. Development of the Federal program “Administrative reform” International experience demonstrates that the most important pre condition for the success in performance based budgeting consists in close coordination of this process with the government reform108.
In accordance with the minutes of the RF Government meeting of October 2004 the Ministry for Economic Development and Trade devel oped and submitted to the Government the Concept of the federal tar get program “Administrative reform”. This concept envisages a course of actions aimed at: (1) Introduction of the performance based budget ing into executive bodies activity; (2) Introduction of standards for pub lic and municipal services; (3) Development and introduction of admin istrative and electronic administrative bylaws; (4) Efficiency improve ment of procurements for state and municipal purposes; (5) Develop ment of special regulating mechanisms in the spheres with high corrup tion and mechanisms for appeal and administrative legal procedure (administrative justice); (6) completion of the revision of redundant and duplicating functions of the executive bodies and elimination of ineffi cient government interference in the economy; (7) reform of the control and supervisory bodies; (8) development of the out sousing system of administrative and managerial processes; (9) reform of the territorial representations of the federal executive bodies; (10) guarantee of Peter Brook. Budgetary Reform in the Russian Federation. Successes and Experience Achieved. Ì., 2004. The Institutional Basis of Budget System Reform. – IMF, April 2004.
transparency and efficient coordination of executive bodies with the structures of the civil society.
Chapter “Performance management” includes the following direc tions:
1. Introduction of a complex system of planning and planning man agement according to the goals and objectives to be achieved by ex ecutive bodies;
2. Introduction of the institute of departmental target programs;
3. Introduction of the principles of performance management re garding sub departmental executive bodies and organizations of local governance.
In the course of development of the mechanisms of departmental planning, they plan resolution of tasks regarding their methodological provision, pilot inculcation into each department, provision of expert consulting.
In order to assist introduction of the institute of departmental target programs in the framework of the Program “Administrative reform”, it is envisaged to conduct a course of actions aimed at the development and interdepartmental control as well as external control of departmen tal target programs implementation.
Creation of a standard normative legal and methodical basis for the subjects of the Russian Federation is envisaged for the introduction of the mechanisms of performance based management in the RF con stituent members. It is also envisaged that this methodology will be ap proved and will be introduced under a supervision of an expert group.
Realization of measures aimed at the introduction of the perform ance management system presupposes close coordination with the measures selected and realized in accordance with the Concept of the budget process reform in the Russian Federation in 2004–2006, the federal target program “Electronic Russia (2002–2010)” and the federal program “Reform of the government service in the Russian Federation (2003–2005)” at the expense of their funds, including:
Improvement of methodology for the development of medium term programs of the Government of the Russian Federation;
Introduction of the elements of the management accounts, which allow receiving adequate information on the costs of the executive bodies’ activities;
Identification of the order of actions adjustment aimed at the im plementation of the plans in case of significant change of priorities and increase of risks of nonfulfillment of the projected programs with corresponding redistribution of resources;
Guarantee of an objective control over realization of plans and im plementation of programs, evaluation of their socio economic effi ciency, audit of the executive bodies efficiency, and formation of the data bank of efficiency evaluations;
Formation of the system aimed at creating incentives for the civil servants, which is based on the results indicators, official regula tions and also terminal contract signed with key servants.
All these goals must be realized along two intertwined directions:
Table Dynamics performance measures109 according to “management by results” by years of realization of the Program “Administrative reform” Performance measures by Unit of years Performance measures evaluation 2005 2006 2007 The share of indices of reports on results and main directions of the federal executive bodies activity, % 31 45 54 fully corresponding to the criteria set by the methodological recommendations The share of performance measures of the federal executive bodies, which reached projected target % * 55 72 values The share of the federal executive bodies, which reached projected values by more than ninety per % 50 60 70 cent of indices The number of the subjects of the Russian Federation, which implemented performance based unit * 5 20 budgeting arrangements in accordance with the set criteria Performance measures indicate the results achieved by the program or individual.
From the point of view of creating preconditions for a successful transition to the performance based budgeting arrangements big role will be played by efficient monitoring systems of performance indicators of the executive bodies and subordinate institutions. In the framework of the Program “Administrative Reform” it is planned to form a perma nent monitoring mechanism of the executive bodies performance and executive bodies of local self governance. Performance based man agement arrangements will be compulsory in their practice.
In this connection, they suppose to solve the following objectives:
Initiation of current monitoring, which guarantees purposeful gath ering of information, which is necessary for obtaining a true picture about the achievement of set goals, tasks and fulfillment of pro jects (programs);
Guarantee of quantitative evaluation on the basis of indices, which characterize interim and final results. Their collection should be organized both by the state statistical agencies and in the frame work of the proper systems of programs and projects’ manage ment;
Development and introduction of revision procedures of the vol ume, truthfulness and objectivity of the information presented by the projects managers;
Organization of the operational analysis of the incoming informa tion with the aim of timely determination of departures from the projected projects’ realization as well as revealing best practice examples;
Evaluation of the results of the analysis of nonachievement of the project’s outcomes results and goals of the executive bodies activ ity (local government) and development of corresponding adjust ment measures.
On the whole, implementation of the Program “Administrative re form” should guarantee necessary consulting support for the perform ance management arrangements.
Table Dynamics of performance measures of the project “Administrative reform” in the sphere of the formation of monitoring mechanism of the executive bodies and local authorities activities Performance measures by Unit of years Performance measures evaluation 2005 2006 2007 The share of performance measures of the administrative reform program, on which a constant % 30 72 100 collection of information is established The share of the federal executive bodies, on % 30 80 100 which monitoring is initiated The share of the subjects of the Russian Federation where monitoring of the executive bodies is % 20 70 100 organized The share of performance measures of the executive bodies, which are included in the monitoring % 15 60 90 system The share of public and municipal services cov% 10 50 80 ered by monitoring 3. Improvement of the civil servants’ remuneration mechanism On the whole, positive results obtained from the development of re ports on the outcome and main performance directions has led to a gradual circulation of such mechanisms (including formalized perform ance measures) at the level of structural departments of the federal ex ecutive bodies. For example, In the Finance Ministry they initiated to develop reports on the outcome and main performance directions of their departments.
In accordance with the Article 24 of the Federal law of 27 July 2004, No. 79 FZ “On State Civil Service in the Russian Federation”, which en tered into force on February 1, 2005, a contract with a civil servant can envisage performance indicators, which measure his/hers results and relate his/her payment to the performance results. The list of rights of a civil servant is supplemented with the right to know performance meas ures and conditions for carrier growth (although at present this right is more of a declaration because evaluation criteria are not formalized yet).