Performance Evaluation at the RF Federal Treasury

Key Features of the Federal Treasury (FT) Impact Evaluation System Activity planning Evaluating actuals and estimates/standards (including cost) that reflect outcomes of the FT operations and functions vs. inputs (financial, physical, labor) used to achieve the outcomes. Evaluating the degree of the expected outcomes achievement Effectiveness evaluation Cost-efficiency evaluation Р – Effectiveness Ф – actual outcome П – expected outcome Э - performance Р - outcome З - cost    

The FT Activity Planning System 8 лет ГRF Government Programs Chairman of the RF Government FT performance indicators 1 год FT Activity Plan RF Finance Minister 5 лет Head of FT FT Strategic Road Map 1 год Key activities under the FT Strategic Road Map and plans for their implementation Deputy Heads of FT, Chief Legal Counsel 1 год Activity plans of FT regional offices (FTRO) Heads of FT HQ Directorates, heads of FTRO and FT IOD FTRO performance indicators 1 год Units action plans Deputy heads of FT HQ Directorates, deputy heads of FT Directorates and FT Interregional Operational Directorates (IOD) Unit performance indicators 1 год Staff activity plans Heads of units at the FT HQ, FT Directorates and FT IOD Staff performance indicators

Effectiveness Evaluation System External evaluation by the authorities, customers, society – annually FT performance evaluation Federal Treasury Regional Office (FTRO) (self-evaluation and evaluation according to the “chain of command”) – annually Heads of FTRO (self-evaluation and evaluation according to the “chain of command”) – monthly External evaluation of FTRO – annually FT body performance evaluation Units within FT HQ Directorates and units within FTROs (self-evaluation and evaluation according to the chain of command”) – quarterly FT unit performance evaluation Staff of FT HQ and FTRO - monthly FT staff member performance evaluation 1. 2. 3. 4.

Types of external evaluations EXTERNAL EVALUATION OUTCOMES: are used to improve the RF Federal Treasury operation; are reviewed by the FT Supervisory Board to develop proposals regarding managerial decisions to be taken by the FT leadership; are made public on the FT website Types of external evaluations Administering questionnaires at websites of FT bodies Surveying external respondents during meetings Requests to Presidential Plenipotentiaries at Federal Districts, heads of supreme bodies of executive power and main spending units (state extra-budgetary funds) Surveys to evaluate collaboration and interaction among FT bodies

1 2 3 4 5 Evaluating performance of FT body (annually) FT HQ to set effectiveness indicators for the Federal Treasury Regional Office (FTRO) 1 FTRO to calculate the value of each performance indicator as a difference between the greatest possible value (10 points) and penalty value* 2 FTRO to calculate the Total Effectiveness Index 3 FT QH Directorates assess FTRO performance Administration Department together with FT HQ checks the submitted indicators’ values (calculations) FTRO are ranked (10 best and 10 worst performers) 4 Drafting a memo to the FT Head with final FTRO performance evaluation for the reporting year FT Head to take decision on effectiveness evaluation 5 * PENALTY: The value is derived by formula based on control activities outcome (not equal to zero in case of violations)

Effectiveness evaluation for FT units (quarterly) Establish effectiveness indicators Head of unit to determine Effectiveness Index (EI) for each task within the unit’s mandate The head of unit to calculate the summary EI for the unit A superior head of directorate to approve tables with summary EI Tables with summary EI to be cleared by the Deputy Head of FT in charge (FTRO) Tables with summary EI to be submitted to the control unit of FT HQ (FTRO) The control unit to submit a memo to the FT Head with final evaluation of unit’s effectiveness Approval of the final effectiveness evaluation Evaluation outcomes are used to support decision-making, including with respect to monetary and non-monetary incentives to staff

Staff Operational Performance Evaluation (monthly) VI Approval of the final evaluation by the head official and making conclusion as to the staff member effectiveness V The sum of all indicators IV Approval of the evaluation by superior managers (heads, deputy heads of FT bodies) III Operational performance evaluation by the immediate superior head of unit Summary effectiveness evaluation Less than 80% -inadequate impact II I Определение исполнения каждого показателя Ообщ = О1 + О2 + ... + Оn, where О1, О2,...,Оn – weights (%) of performance indicators Setting effectiveness indicators Gauging the attainment of each indicator An automated system to evaluate FTRO heads and the director of the Center for FT Activity Support has been developed 1 successfully passed acceptance trials 2 ready to be commissioned

The total of four evaluation components is 100% Staff Effectiveness Indicators Structure The total of four evaluation components is 100% 10-30% Action plans Labor and performance discipline Individual assignments by managers Key functions performed

The Automated FT Staff Effectiveness Evaluation System Staff member А of Unit № 1 Head of FT, Administrative Department The automated evaluation system is piloted at the FT HQ Staff member B of Unit № 1 Head of Unit №1 Staff member self-evaluation Obtain Summary Effectiveness Evaluation Заверено ЭП Clear with immediate manager and seek approval by the head of directorate Staff member C of Unit № 1 Head of Directorate Submit the tables with Summary Evaluation to the Administrative Department Submit the Final Evaluation to the FT Head

1 2 Key areas of reforming the FT effectiveness evaluation system Simple and Uniform Evaluation develop 4 groups of universal indicators fewer indicators 1 Objective and Measurable Impact Evaluation develop measurable indicators that can be assessed and tested using relevant software and/or during control activities unbiased evaluation following established rules 2

FT performance evaluation Performance evaluation is the total of effectiveness, cost-efficiency and other efficiency evaluations Three levels of evaluation By information user performance can be classified as follows: Civil society and customers RF Ministry of Finance Treasury of Russia (internal managerial efficiency) Informing society and citizens 1 External evaluation by the public against the following criteria: ensure TSA liquidity; securing funds of public-law entities. Evaluation by customers: main spending units, regional and local governments Evaluating performance of the FT as a subordinate entity of the RF MOF Boosting managerial efficiency using the analysis of financial, physical, labor inputs vs. scope of functions performed. Informing superior federal bodies of executive power 2 Informing the leadership of the Federal Treasury 3

The FT cost-efficiency index to inform society and citizens (Эог) Эог = Роз / З, where: Роз – public deliverables of the FT, M rubles; З – FT operating costs, M rubles. The FT activity outcomes are derived by the formula: Роз = Рп + Рв + Рл + Рк + Рю, Рп – revenues to the budgets of the RF budget system allocated and recorded by the FT, as well as revenues to entities that do not participate in the budget process and are served by FT bodies; Рв – cash payments from the budgets of the RF budget system, made and recorded by the FR, as well as cash payments of entities that do not participate in the budget process and are served by FT bodies; Рл – cash amounts received (or attracted) as revenues of the federal budget in the course of TSA cash management; Рк – cash amounts saved by the FT in the budgets of the RF budget system in the course of and ex-ante and ongoing financial control from unreasonable and inappropriate use; Рю – cash amounts saved by the FT in the budgets of the budget system as a result of legal work.

1. Indicators of functional activity FT Key Performance Indicators (1) № Indicator 1. Indicators of functional activity 1.1 Total budget appropriations provided by the FT bodies to main spending units, spending units and federal budget holders 1.2 Total funds provided by the federal budget to the budgets of the RF budget system as intergovernmental budget transfers 1.3.1 Number of enforcement documents enforced 1.3.2 Amounts obtained upon enforcing enforcement documents 1.4 Amounts obtained upon enforcement of tax authorities’ decisions 1.5 Federal budget funds on bank deposits 1.6 Budget credits provided to replenish account balances of regional (local) budgets 1.7 Funds placed under repo agreements 1.8 Revenues from managing federal budget single account balances 1.9 Total number of inspections made 1.10 Total amount of budget funds inspected 1.11 Total amount of violations identified after inspections 1.12 Number of fines levied after inspections 1.13 Total amount of fines levied after inspections 1.14 Total amount of fines paid after inspections 1.15 Number of enforcement actions taken after inspections performed in the financial and budgetary sphere 1.16 Number of corrective actions taken after inspections related to audit institutions supervision

FT performance indicators (2) № Indicator 2. Indicators of support activity 2.1 Cost of supporting functions/powers of the Federal Treasury 2.2 Cost of maintaining government information systems (GIS) for which the FT was defined as the operator 2.3 FT headcount 2.4 Number of budget holders 3. Performance (effectiveness) indicators 3.1 Federal budget revenues from managing TSA balances vs. cost of supporting FT functions/powers (except the cost of maintaining GIS for which the FT was defined as the operator) 3.2 Financial outcomes (additional revenues of the federal budget) of managing TSA balances 3.3 Average cost per FT staff member considering the cost of supporting FT functions/powers (except the cost of maintaining GIS for which the FT was defined as the operator) / year 3.4 Unused balances of legal entities transferred to the federal budget as revenues

FT performance index to inform superior federal bodies of executive power (Эво) Эво = Эво1 + Эво2 + Эво3 + ….... Эвоn / n, где: n – number of planned activities; Эво1; Эво2; Эво3; Эвоn – indices of cost-efficiency in implementing relevant activities under the RF government programs (FT action plans), derived by the formula: Эвоi = Фэi / Пэi х 100%, where: Фэi – actual value of implementing relevant activity under the RF government program (plan); Пэi – expected target value of implementing relevant activity under the RF government program (plan).

in order to inform the FT leadership: Evaluating cost-efficiency of FT operations to inform the FT leadership (1) Three analytical indicators are used to evaluate cost-efficiency of FT operations in order to inform the FT leadership: – government functions delivery cost index (Ис); – government functions delivery labor-intensity index (Ит); – government functions delivery quality index (Ик).

Evaluating cost-efficiency of FT operations to inform the FT leadership (2) The government functions delivery cost index (Ис) is a relative measure describing deviations of the actual cost from target figures, and is derived by the formula : Ис = Сп / Сф х 100%, where: Сп – target cost of government functions delivery, M rubles; Сф – actual cost of government functions delivery, M rubles. The government functions delivery quality index (Ик) describes expected (standard) quality of government functions delivery vs. actual delivery, and is derived by the formula: Ик = Кф / Кп х 100%, Кф – actual quality of government functions delivery; Кп – expected (standard) quality of government functions delivery. The government functions delivery quality index (Ик) describes expected (standard) quality of government functions delivery vs. actual delivery, and is derived by the formula:

Full automation of performance evaluation Future Development Key tasks in developing FT performance evaluation system Full automation of performance evaluation Update of regulatory framework Performance evaluation development is crucial to: improve government functions delivery; ensure efficient use of budget resources; successfully implement civil service reforms.

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