WWW.DISSERS.RU


...
    !

Pages:     | 1 |   ...   | 23 | 24 || 26 | 27 |   ...   | 102 |

Setting up the procedures governing the temporary exercise of fiscal powers vested with state authorities of RF subjects (local governments) in the case of introduction of a provisional financial administration Until the middle of 2003, special legislative regulation of the status of insolvent re gions and municipal entities has been practically nonexistent. At the same time, article of the RF Budget Code envisaged the possibility to undertake certain measures with re spect to regions (municipal entities) in the case they exceeded the caps on the amounts of deficit, debt, and (or) expenditures associated with the servicing of the debt, or defaulted on their debt obligations; however, in practice this article did not work. Besides, the meas ures stipulated by this article, which could be undertaken by the superior financial authority with respect to insolvent regions (municipal entities), like to inspect the execution of the budget or place it under the control of a superior financial authority seem to be inefficient, since insolvency practically always results from the decisions taken by the representative body and can not be overcome in the process of execution of the budget.

RUSSIAN ECONOMY in trends and outlooks A qualitatively new phase of development of the legislation in this area has started with the adoption of federal laws No. 95 FZ and 131 FZ and was completed with the intro duction of law No. 120 FZ, which supplemented the RF Budget Code with article 19.1. This article regulates the status and functions of provisional financial administration introduced in the case of insolvency of an RF subject or a municipal entity.

The major tenor of article 19.1 of the RF Budget Code is as follows. In the case the overdue indebtedness associated with the fulfillment of debt and (or) budgetary obliga tions originating through the fault of the state authorities of an RF subject (local govern ment) exceeds 30 per cent of own revenues of the respective budget in the last reporting year, in such an RF subject (municipal entity) for up to a year there should be introduced a provisional financial administration (p. p. 1, 3, article 168.2 of the RF Budget Code). The provisional financial administration should not be introduced within one year since the date the representative body of the state authority of the RF subject (representative body of lo cal government) was vested with power (item 5, article 168.2 of the RF Budget Code). In RF subjects, the provisional financial administration should be introduced on request of the RF Government by decision of the Supreme Arbitration Court, as concerns municipal enti ties, on request of the top executive or the head of the supreme executive authority of the RF subject and (or) representative body of the municipal entity, the head of the municipal entity by decision of an arbitration court of the subject of the Russian Federation (item 3, article 168.2 of the RF Budget Code).

According to article 168.3 of the RF Budget Code, the provisional financial admini stration introduced in the subject of the Russian Federation (municipal entity) should exer cise the following powers:

organize inspection (audit) of the budget of the RF subject (local budget) in accor dance with procedures set up by the Government of the Russian Federation (the ex ecutive state authority of the RF subject);

organize audit of the overdue indebtedness related to the debt and (or) budgetary obligations of the RF subject (municipal entity) in accordance with the procedure set forth by the federal law;

develop a draft plan as concerns rehabilitation of solvency of the RF subject (municipal entity);

elaborate and submit to the state authorities of the RF subject (local government) draft normative legal acts of the RF subject (local government) envisaged by the plan of re habilitation of solvency of the RF subject (municipal entity) as approved by the Su preme Arbitration Court of the Russian Federation (arbitration court);

in the case a draft law of the RF subject (draft decision of the representative body of municipal entity) elaborated by the provisional financial administration as concerns the amendments to the law of the RF subject (draft decision of the representative body of municipal entity) on the budget of the RF subject (local budget) for the current year, or a draft law of the RF subject (draft decision of the representative body of municipal en tity) on the budget of the RF subject (local budget) for the next financial year is not adopted within one month since such draft law has been presented by the provisional financial administration to the legislative state body of the RF subject (representative body of the municipal entity), or adopted with amendments not approved by the head of the provisional financial administration, the provisional financial administration should submit to the RF Government (supreme executive body of the RF subject) the respective draft budgets for submission to the State Duma (legislative body of the RF subject) for approval of these draft budgets by a federal law (the law of the RF subject);

Section 2.

Monetary and budgetary spheres in the case the draft normative legal acts of the executive authorities of the RF subject (local administration) elaborated by the provisional financial administration are not adopted within 15 days since such draft documents have been presented by the provi sional financial administration, or adopted in a version not approved by the head of the provisional financial administration, the provisional financial administration should ap prove the aforesaid drafts;

control the implementation of the plan of rehabilitation of solvency of the RF subject (municipal entity) approved by the Supreme Arbitration Court of the Russian Federa tion (arbitration court) and the respective normative legal acts;

control execution of the budget of the RF subject (local budget).

In accordance with the temporary provisions envisaged by law No. 120 FZ, the stipu lations of article 19.1 of the RF Budget Code as concerns RF subjects will enter into force since January 1, 2007, and as concerns municipal entities since January 1, 2008.

Among the positive features of the innovations relating to the regime of provisional fi nancial administration introduced by law No. 120 FZ, there should be noted the reflected in the law definition of the insolvency of the region (municipal entity). The merit of this definition is, first, that the provisional financial administration may be introduced not only in the case the marginal amounts of the debt or expenditures associated with the servicing of the debt are exceeded, but also in the case of the factual default on debt obligations. This option permits to refrain from taking coercive measures with respect to the region (municipal entity), which has not yet exhausted the capacity to overcome its financial crisis situation by its own efforts, for instance, via restructuring of the debt, attraction of additional borrowings for refinancing of the debt, and (or) reduction of expenditures.

The second merit of this definition is that it concerns only the indebtedness, which was originated through the fault of the region or the municipal entity. In other words, the indebtedness originated through the fault of superior authorities is excluded from the composition of the liabilities, which should be taken into account in the course of detection of the indications of insolvency. Thus, the upper levels of the budgetary system can not shuffle off the responsibility for their ill considered decisions on to the lower tiers.

Yet another merit of the definition of insolvency introduced by the law is that along side with the indebtedness related to the obligations included in the composition of the re gional (municipal) debt there should be also taken into account the indebtedness relating to the budgetary obligations. It is an important condition permitting to avoid discrimination of certain creditors of a region (municipal entity) against the others. In the case insolvency is detected proceeding only from the amount of liabilities included in the composition of the public (municipal) debt in the narrow sense of the term (i.e. liabilities resulting from credit agreements, guarantees, and bond issues) creates incentives to repay such liabili ties at the expense of accumulation of creditor indebtedness relating to other types of ob ligations to be met at the expense of the debtors budget. Such obligations include both the liabilities of the public law nature (i.e. those resulting form laws and other normative legal acts envisaging budgetary expenditures), and liabilities of the civil law character, which are not included in the composition of the public (municipal) debt as defined by the law. The latter include, for instance, liabilities resulting from contracts for purchase of goods, works, or services for state and municipal needs, liabilities relating to remuneration of labor of employees of budgetary organizations, etc. At the same time, in order to ensure the efficient functioning of the provision permitting to take into account the indebtedness relating to budgetary obligations in the process of taking the decision about the introduc tion of the provisional financial administration, it is necessary to settle the issue of what types of indebtedness and of what types of the subjects of the public sector are included in RUSSIAN ECONOMY in trends and outlooks the indebtedness of this budget. Without the regulatory settlement of this issue, there are possible abuses on the both sides.

As it appears, the major flaw of the provisional financial administration procedure en visaged in laws No. 95 FZ and 131 FZ, as well as in the respective article of the RF Budget Code, is the excessive extent of interference of superior authorities in the budgetary proc ess of the debtor. For instance, article 19.1 of the RF Budget Code stipulates that in the case a region or a municipal entity fails to adopt the law on the budget in the version pre sented by the provisional financial administration, the budget law should be adopted by a federal law in the case of the RF subject, and by a law of the RF subject for a municipal en tity. This stipulation appears to be rather arguable taking into account the fact that the Constitution does not envisage the option of adopting federal laws on the issues not being in the jurisdiction of the Russian Federation or in the shared jurisdiction of the Russian Federation and its subjects; or regional laws on the issues of local importance (while article 132 of the Constitution directly stipulates that approval and execution of local budgets are issues of local importance).

Besides, this provision of the law minimizes the role of the court as a moderator in the framework of insolvency proceedings concerning regions (municipal entities). In the situa tion, where superior authorities are vested with the right to approve the final version of the law no the debtors budget, the importance of the plan of rehabilitation of the debtors sol vency approved by the court is leveled. It should be noted that in the case the regional budget is approved by the federal law, it is impossible to contest its contents even in the case it contradicts to the plan of rehabilitation of solvency approved by the court, since federal laws may be contested only on the grounds that they are at variance with the Con stitution. Therefore, the commented provisions create risks that superior authorities may abuse the powers vested with them in the framework of insolvency proceedings.

More precise definition of procedures governing the cash servicing of the execution of the budgets of the Russian budgetary system The new version of article 215 1 of law No. 120 FZ stipulates that cash servicing of the budgets of all tiers of the budgetary system of the Russian Federation should be vested with the Federal Treasury and be implemented via accounts with the Bank of Russia. If agreed with the executive authorities of the RF subject, the powers of the Federal Treasury as concerns cash servicing of the execution of the budget of the RF subject (budgets of territorial state extra budgetary funds of the RF subject) and budgets of municipal entities may be transferred to the executive authorities of the RF subject on condition that the said powers are financially ensured at expense of own revenues of the RF subject and that the RF subject owns (uses, manages) the property necessary for the exercise of such powers.

Therefore, it may be asserted that as a result of the changes introduced in the Code, the powers of the Federal Treasury concerning the process of execution of subnational budgets were formally broadened (earlier, the cash execution of budgets was imple mented only in the RF subjects being recipients of grants for equalization of budgetary se curity from the federal budget). At the same time, there is observed a formal limitation of the powers vested with the Federal Treasury. While earlier item 1 of article 134 of the RF Budget Code (as not amended by law No. 120 FZ) has envisaged that the Federal Treas ury directly executed the budgets of subsidized RF subjects30, the new version of the RF In accordance with the previous version of item 1 of article 134 of the RF Budget Code, the financial aid allocated from the federal budget for the purposes of equalization of minimal budget security was provided to RF subjects on condition that such RF subjects should sign agreements on the execution of the respective regional budget via the Federal Treasury. There is no such provision in the new version of the RF Budget Code (see article 130 of the new version of the RF Budget Code).

Section 2.

Monetary and budgetary spheres Budget Code envisages only cash servicing of the execution of budgets. At the same time, article 6 of the RF Budget Code notes that cash servicing of the execution of budgets is de fined as the carrying out and accounting of the operations related to cash revenues and cash expenditures of the budget. Although the Code contains the definition of cash servic ing, it remains unclear what it implies.

Pages:     | 1 |   ...   | 23 | 24 || 26 | 27 |   ...   | 102 |



2011 www.dissers.ru -

, .
, , , , 1-2 .