Nikolay Begchin, Deputy Director of Budget Methodology Department Program – Based Instruments for Long – Term Budgeting Development in the Russian Federation Nikolay Begchin, Deputy Director of Budget Methodology Department

System of Strategic Program-Oriented Planning Long-term Development Strategy (Concept) Goal setting Sectorial strategies Long-term socioeconomic development forecast Long-term budget forecast Conditions Socioeconomic development forecast for 3 years Budget for 3 years State Programs what? who how? Authorities and tools External audit Annual plans and reports

The State Program should: Be a tool for achievement of the public policy goals in a corresponding sphere (sector), i.e. should determine goals, responsibilities (authorities) and tools Have measurable, specific and verifiable outcome measures (including KPI of institutions and their heads), be used for evaluation of activities of the Government of the RF and federal executive authorities Envision utilization of all pubic policy implementation tools (regulation, reforms, control and supervision, tax benefits, and not just budget expenditures) Have realistic mid-term ceilings for budget expenditures that do not require permanent reduction, and should cover all expenditures related to the sector (sphere) Set requirements to relevant state programs of constituents of the RF and should have coordination frameworks for activities of RF constituents Be the main planning and reporting document of a responsible executor that has to arrange for and coordinate its implementation using project management methods

Inter-sectorial model for state (municipal) program implementation Department 1 Department 2 Department 3 Program 1 Program 2 Program 3 Program 4 Inter-sectorial model for state (municipal) program implementation Department 1 (resp. administrator) ... Department n Department 2 (resp. administrator) ... Department n Department 3 (resp. administrator) ... Department n Program 1 Program 1 Program 1

Expenditure classification code The Structure of a State Program and its Disclosure in the Budget Classification State Program Sub-program 1 Sub-program 2 FSP DSP 1 … Main action 1 DSP m Main action n Action 1 Action k Action l X Expenditure classification code

Disclosure of Main Actions in Budget Documentation Federal Budget 2014-2016, 2015-2017. Chapter Section Sub-section Special-purpose items Type of expenditure KOSGU OM (analytics) SE PP Item of expenditure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 - Х Federal Budget 2016-2018, option Chapter Section Sub-section Special-purpose items Type of expenditure KOSGU (accounting and reporting) SE PP OM Item of expenditure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 - Х

Information Interaction AIS “State Programs” Structure of the state program Elements of expenditure classification Resource support for the state program Allocation of expenditures on BCC while preparing the budget Proposals on adjustment of the state program Budget, summary quarterly breakdown Approved / specified state program Cash administration of the budget by expenditures Annual report  consolidated annual report on state programs Annual report on execution of the budget Package sent to the State Duma

Insufficient integration of state programs into the budget process # Problem (shortcoming) Proposals on resolution (elimination) 1 The main subject of the budget process is a participant of the state program and not the responsible administrator  the role of the responsible administrator in the course of planning budget expenditures, responsibility for their efficiency and quality of the state program management are of formal nature Delegation of all authorities with respect to allocation of budget appropriations for the state program to its responsible administrator (at present, allocation of appropriations in the Ministry of Finance is done by main federal budget fund administrators) 2 Combination of program and functional classification of budget expenditures  complication of the budget structure, reduction of its transparency and flexibility of appropriations management Maintenance of the consolidated budget quarterly breakdown only in the program classification while preserving the functional one within the limits of budget commitments and in the reports 3 Lack of possibilities for reallocation of budget appropriations between state program actions in the course of execution of the budget  lower efficiency of managerial decisions Expanding flexibility during execution of the federal budget – reallocation of appropriations between the state program actions (within the limits of 10% of the total volume) without reducing target indicators 4 Detailed information on planned values of indicators expected outcomes and contents of state program actions is not submitted to the Federal Assembly  formal discussion of qualitative parameters of state programs during consideration of the draft budget Securing the need to submit to the State Duma draft state programs (amendments to them) at the same time the draft budget is submitted