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Regular version of the site

Tools for managing the efficiency of state resource utilization

2010

In the years preceding the financial and economic crisis, amid a favorable economic environment in external markets, a trend emerged of sustained growth of budget expenditure unaccompanied by an increase in efficiency. it remained traditional for areas of the Russian economy to irrationally use resources in the public sector, in public procurement and in the state apparatus. Activities aimed at implementing management and budgeting methods were not carried out as a whole, and many of the regulatory, legal and procedural issues remained unresolved.

Overcoming the fallout of the crisis and creating the new image of post-crisis Russian economy, first and foremost, requires the implementation of efficient methods of budget expenditures – the network of measures used by institutions and mechanisms, established in recent years during public administration and budget reform.

The purpose of this research is to develop methodological approaches to introducing tools of efficient management of public resources in current processes of administration and management (budget, lawmaking, regulatory, law enforcement, carrying out existing complexes of activities).

During the research, we focused on the following tasks:

  • Analysis of the efficiency of budget expenditure and elaboration of proposals for improvement.
  • Developing a system for monitoring the quality of the Russian Government Program aimed at improving the efficiency of budget expenditure.
  • Identifying the institutional conditions for improving the efficiency of state property management.

The information base used in the paper included regulatory acts in the area of strategic planning, budgeting and activity control, results of monitoring the implementation of administrative regulations (IPAMM, 2008), results of the project Instruments of Monitoring in Systems of State Strategic Planning (2009).

In the course of the paper, we carried out an analysis of budget expenditure efficiency and prepared proposals to eliminate the main areas of inefficiency, including:

  • Review of expenditure commitments as the main activity for operational regular audit of budget expenditure efficiency,
  • Ensuring budget expenditure efficiency in the implementation of projects related to the main areas of Russian Government activity in the medium term,
  • Improving the quality of state function performance and government services as foundation of long-term budget expenditure efficiency.
  • Using an example of analysis of budget expenditure efficiency in some sectors, we demonstrated approaches to implementation of the above-mentioned proposals.

The scale of improving efficiency of budget expenditures is characterized by the reserves available in this area. First of all, these reserves are associated with excessive government involvement in the economy, non-optimality of state commitments in terms of their volume, targeting and forms, broad interpretation of legally prescribed financial obligations and unbalanced obligation distribution across budgeting systems. Amid the overall growth of financial security of state-financed organizations during the pre-crisis period, the quality of services rendered by these organizations remained poor, falling behind individual and business requirements. Currently, the state dominates not only in the traditional "state-financed" sectors (such as education, healthcare and social security), but also in several other industries, producing goods that do share the properties of public goods and are not related to securing individuals’ constitutional rights - and therefore essentially do not require state participation.

Due to the fact that the efficiency of budget expenditures can be determined only at the end of every budget cycle, it is necessary to have instruments for current adjustment of projects and programs that have a direct impact on budget efficiency. Therefore we developed proposals for a system of monitoring the implementation quality of the Program aimed at improving the efficiency of budget expenditure.

The amount of expenditure earmarked for public property maintenance, including state-financed organizations and entities, is estimated at up to 35% of the consolidated budget expenditures of the Russian Federation. We determined institutional conditions for improving the efficiency of public property management, including that of state enterprises and entities and worked out proposals to streamline the system of corporate governance for state-related companies.


 

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