What measures have been taken for failure to utilize budget funds? Ineffective use of budget funds: review of arbitration practice

Review for January 2014 - May 2015

1. Payment for the services of third-party organizations for the implementation of construction control if the recipient of budget funds has a specialist on staff who is entrusted with the responsibility for monitoring the quality and volume of construction, installation and repair work of contractors for compliance with design and estimate documentation, was recognized by the court as an ineffective use of budget funds funds

In favor of the inspector

During the audit, ineffective spending of federal budget funds was established, which was expressed in the fact that the effectiveness of the use of the provided budgetary allocations in the amount of 112,954 rubles was not ensured, since in the presence of a chief specialist expert, whose job responsibilities include monitoring the quality and volume of construction, installation and repair work of contractors for compliance with design estimates, the recipient of budget funds in 2012 incurred expenses under contracts for the provision of construction control services to third-party organizations.

The court came to the conclusion that these expenses are not a given result of the activities of a government institution and the expenses for these needs are ineffective.

(Source: Resolution 15 of the AAS dated 03/02/2015 in case No. A32-22966/2014)

II. Inefficient use of property

1. The equipment was written off before the expiration of the warranty period by the recipient of budget funds based on the conclusion of an employee of an organization that is not an authorized service center of the manufacturer. In addition, when justifying the inexpediency of further operation of the equipment, the estimated cost of restoration repairs of the equipment (its parts) was not determined. Under such circumstances, the decision to write off property may be considered unfounded.

In favor of the inspector

The recipient of budget funds purchased the equipment with a guarantee of service by authorized service centers. According to the judges, within the service life, warranty period of the manufacturer and the seller, in the presence of authorized service centers specializing with the support of the manufacturer in the repair of devices, only an authorized service center of the manufacturer can act as an appropriate expert in deciding the issue of equipment malfunction and the inappropriateness of its repair . The absence of such a service center in the locality in which the public sector organization is located is not an obstacle to this organization exercising its rights and fulfilling its responsibilities for the proper operation and write-off of property.

In addition, the judges indicate that when experts justify the impossibility of operating decommissioned equipment (its parts) and the inexpediency of repairing the equipment (its parts), the relevant documents must contain information:

1) about the qualifications and experience of the experts who conducted the study;

2) about the method of examining faulty equipment;

3) about the causes of breakdowns;

4) about the estimated cost of restoration repairs (if there is a possibility of restoring the functionality of the equipment).

Failure to comply with the above conditions indicates that the write-off of equipment due to the inexpediency of its repair is unjustified.

(Source: decision of the Administrative Court of the Kemerovo region dated March 18, 2015 in case No. A27-22731/2014, resolution 7 of the Arbitration Court dated May 29, 2015 No. 07AP-4287/15)

Review for 2013

I. Ineffective use of budget funds

1. It was established that the estimated cost was overestimated by the developer and general contractor due to the discrepancy between the applied unit prices of the work technology, which was recognized by the court as an ineffective use of budget funds.

In favor of the inspector

During the inspection of the Rosfinnadzor technical specifications, facts of illegal payment for work from the federal budget of the recipient of budget funds (hereinafter referred to as the institution) under the state contract dated December 11, 2009 were revealed. It is prescribed to take actions to ensure the return to the federal budget of illegally paid for work under the contract.

According to the conclusion on the correct application of building codes and prices when drawing up estimate documentation for project estimates, an overestimation of the estimated cost for KS-3 was established. An analysis of the overstatements made by the developer and the general contractor during construction shows that the overstatements were made mainly due to the discrepancy between the applied unit prices and the work technology. Thus, when laying road slabs for improvement, prices for airfield construction were applied, and when laying floors in warehouses, prices for monolithic foundations were used. About 25% of the overstatements were due to incorrectly applied prices for construction materials. The prices for non-metallic materials sand and crushed stone, waterproofing mastic, rails and other materials are inflated. The backlog of work included in the control measurement report is 15%. The certificates of completed work unreasonably include coefficients for crowding and roof dismantling. Overstatements were made due to non-compliance with the technology for performing finishing work in warehouses.

Thus, in violation of the requirements of Art. 162 of the Budget Code of the Russian Federation, Article 309, Civil Code of the Russian Federation, under a state contract for the performance of work by an institution at the expense of the federal budget, work was improperly paid for, including: actually uncompleted work, work at an inflated estimated cost, the application of increasing factors to construction work, inconsistency of applied prices to the technology of the work performed, soil transportation.

The court found justification for the conclusions of Rosfinnadzor's technical authority about the ineffectiveness of spending budget funds, since in this case the tasks assigned to the participant in the budget process could have been completed using less funds. The contested order is legal and justified both in law and in size.

(Source: resolution of the Federal Antimonopoly Service of the North-Western District dated December 23, 2013 N F07-7389/13 and decision of the Arbitration Court of St. Petersburg and the Leningrad Region dated March 29, 2013 in case N A56-49514/2012)

2. Overestimation of the contract price as a result of the unlawful application of the coefficient when calculating additional costs for the increased cost of work in winter due to incorrect application of the provisions of the regulatory act confirms that the tasks assigned to the recipient of funds could have been completed using less funds.

In favor of the inspector

TU Rosfinnadzor carried out an audit of certain issues of the financial and economic activities of the UKS administration for the period from 01/01/2011 to 12/31/2011. The fact of ineffective (uneconomical) use of interbudgetary transfer funds that has a designated purpose has been revealed. The submission dated August 20, 2012 proposed to take measures to prevent further ineffective (uneconomical) use of funds.

The UKS Administration has concluded municipal construction contracts. It was established that payments under contracts were made at inflated prices, due to the unlawful use of the coefficient of 1.7 when calculating additional costs for increasing the cost of work in violation of the provisions of the “Collection of estimated standards for additional costs when carrying out construction and installation work in winter GSN 81-05-02- 2007", since the scope of work does not include external engineering networks, landscaping and landscaping.

The loans came to the conclusion that the conclusion of the Rosfinnadzor department about the ineffective (uneconomical) use of funds was correct. The applicant's appeal to the execution of the municipal contract within the price established by the terms of the contract was rejected, since the courts found that the tasks assigned to the applicant could have been completed using less funds.

(Source: resolution of the Federal Antimonopoly Service of the Far Eastern District dated July 24, 2013 N F03-3180/13)

3. Sources of information on food prices can be not only data from state statistical reporting. Advance payments in themselves cannot be regarded as an ineffective use of regional budget funds. Clause 2 of Art. 53 of the Town Planning Code of the Russian Federation does not provide for the customer’s right to control the cost of building materials purchased by the developer and to request documents confirming it.

In favor of the person being audited

In 2012, the Chamber of Control and Accounts (CAC) conducted an audit of the effectiveness of the activities and use of budgetary funds by the recipient of budgetary funds (municipal medical budgetary institution) for the period 2010-2011. Based on the results of the audit, ineffective use of funds was revealed, a proposal was made to eliminate violations, the institution was asked to recover from contractors the damage caused to the budget in 2011 and return funds to the appropriate budgets (according to the source of financing).

In 2011, the institution purchased food products. During the inspection, KSP carried out a selective comparative analysis of prices, only according to the data of the state statistics department for the city of Samara, and concluded that food products were purchased at prices higher than the average market (retail) price by an average of 18.6%. The courts have noted that sources of information on product prices can be not only state statistical reporting data, but also official websites, contract registers; information on manufacturer prices, publicly available results of market research, market research conducted at the initiative of the customer (authorized body), including under a contract or civil law agreement, other sources of information, taking into account such conditions taken into account when calculating the contract price, such as: terms (periods) of supply of goods (works, services); place of delivery of goods (works, services); terms and conditions of payment for the delivery of goods (works, services), etc.

In December 2011, the institution received invoices for payment of advances for heat supply, water supply and sanitation for the specified period. Payment is made in strict accordance with received invoices. As a result of accruals made by suppliers for the actual consumption of utilities (resources), an overpayment was established at the end of the month, which was reflected in the invoices for December 2011, January-February 2012 and, accordingly, the institution’s expenses for 2012 decreased. The PSC noted that the Institution violated the requirements of the decision of the City District Duma, according to which recipients of budget funds have the right to provide for advance payments in the amount of 100% of the cost of services for December 2011 under contracts for the provision of utility services. The courts indicated that advance payments in themselves cannot be regarded as an ineffective use of budget funds.

In 2010-2011 budget funds for capital and current repairs were transferred to the institution on the basis of municipal contracts and agreements concluded with contractors, where the price was determined in a fixed amount; The acceptance certificates for the work performed were signed by the institution and its contractors without comments or complaints and are fully consistent with the estimate agreed upon by the parties. The PSC noted that as a result of violations of paragraph 2 of Art. 53 of the Civil Code of the Russian Federation, requirements for maintaining executive documentation, budget funds were used ineffectively. The following violations were identified: reflection of an excessive amount of materials, volumes of work that were not actually performed, overestimation of the cost of materials and work as a result of incorrect application of prices (inflated standards and prices for materials and work), replacement of materials with cheaper ones, low-quality materials supplied and work performed, inefficient use of budget funds, expressed in the lack of confirmation of the cost of materials with invoices indicated in the certificates of work performed.

The court indicated that clause 2 of Art. 53 of the Civil Code of the Russian Federation does not provide for the customer’s right to control the cost of construction materials purchased by the developer and to request documents confirming it.

The courts stated that the PSC did not provide evidence that when concluding contracts, the institution went beyond the powers granted to it; ineffective use of budget funds; that the assigned tasks for the execution of municipal contracts for the renovation of premises could have been completed using less funds or a better result could have been achieved.

(Source: resolution of the Federal Antimonopoly Service of the Volga Region dated July 25, 2013 N F06-6033/13)

4. Responsibility for the initially incorrectly set maximum price from which the competitive countdown began, and the excessive expenditure of budget funds lies with the person responsible for the development of estimate documentation and its approval.

A state contract (contract) dated March 16, 2009, was concluded between the Department of Capital Repairs of the Housing Fund (Department) and the OJSC (company) to carry out major repairs of an apartment building. As a result of the audit carried out by the Chamber of Control and Accounts (CAC) of facts of ineffective use of budget funds as a result of the execution of a state contract, an overestimation of the control volumes of work was revealed. This amount is claimed to be recovered from society as unjust enrichment.

The court found that the company completed the work provided for in the contract and handed it over to the state customer in the prescribed manner, which is not disputed. The results of the work were accepted without comments on the volume and quality and paid for, and therefore the court came to the conclusion that the argument that the defendant had overestimated the cost of the work was invalid.

The argument about the overestimation of the cost of work, identified in 2011 by the PSC following an audit of facts of ineffective use of budget funds as a result of the execution of the contract, was rejected. By virtue of the provisions of Federal Law N 94-FZ of July 21, 2005, the state contract concluded as a result of the competition must comply with the draft contract attached to the competition documentation and include the conditions proposed by the winner or the only participant. Changes to the tender documentation, including the draft contract, are possible only in the manner established by Federal Law. The initial (maximum) contract price (lot price) and the local estimate attached to the tender documentation are developed and approved by the authorized body (customer). Participants in placing orders do not participate in the formation of the initial (maximum) contract price (lot price) and the preparation of local estimates. The contract price is fixed and cannot change during its execution. Federal Law N 94-FZ establishes an exhaustive list of conditions when the contract price can be changed.

The company signed the contract and the estimates attached to it in the form in which they were included in the tender documentation, and followed the specified estimate when performing the work and drawing up the work acceptance certificate.

The company is not a participant in the budget process, and should the department apply improper prices, it should not suffer adverse consequences. Responsibility for the initially incorrectly set maximum price from which the competitive countdown began, and the excessive expenditure of budget funds lies with the person responsible for the development of estimate documentation and its approval.

(Source: resolution of the Federal Antimonopoly Service of the Moscow District dated October 30, 2013 N F05-12874/13)

5. During the implementation of control and expert-analytical activities, the PSC does not have the right to assess compliance with the provisions of other branches of legislation regulating public and private legal relations. The fact of non-fulfillment of work during the period of the control measure is not a basis for imposing an obligation to restore subsidy funds to the budget and collect funds from the contractor.

In favor of the person being audited

In the period from 05/11/2012 to 06/28/2012, the Chamber of Control and Accounts (CAC) conducted an audit of the expenditure of budget funds for the overhaul of the dam, during which it was revealed that, in violation of Art. 34 of the Budget Code of the Russian Federation, the Administration of the municipal district (Administration) has not ensured the effectiveness and efficiency of the use of budget funds. The PSC proposal proposed that the Administration implement municipal contracts related to water management work after the contractor receives a decision to provide the water body for use (clause 1); when placing municipal orders for construction and major repairs, include design and estimate documentation in full as part of the auction documentation (clause 2); in municipal contracts for the provision of construction control services, provide for measures of financial responsibility of the contractor for accepting inflated volumes and (or) costs of work (clause 3); exclude facts of acceptance of inflated volumes and costs of construction and repair work (clause 4); complete the work on recognizing the right of municipal ownership of the hydraulic structure (clause 5); restore to the regional budget the subsidy funds used to pay for the inflated volumes of work on major repairs of the dam (cleaning the river bed at a distance of 130 m with loading and removal; loading the dam ridges with stones) and take measures aimed at reimbursing the specified funds to the regional budget from the amounts received by the contractor (clause 6).

The courts, having analyzed the powers of the PSC, defined by Federal Law No. 6-FZ, as well as the Law of the Vologda Region dated July 12, 2011 N 2574-OZ, came to the conclusion that paragraphs 1-5 of the contested submission were invalid, as rendered outside the competence of the PSC, noting that During the implementation of control and expert-analytical activities, the PSC does not have the right to assess compliance with the provisions of other branches of legislation regulating public and private legal relations.

No violations were identified in the expenditure of budget funds due to the implementation of water management works, the inclusion of design and estimate documentation in the auction documentation and in municipal contracts for construction control services of measures of financial responsibility of the contractor, as well as the acceptance of the volume and cost of work during the control event. , and the right of municipal ownership of the Glebovskaya Dam real estate property was recognized by the decision of the district court dated June 14, 2012.

The loading of the dam ridges with stone was completed in June 2012, and the fact that these works were not completed before December 20, 2011 and during the period of the PSC control event is not the basis for imposing on the Administration the obligation to restore subsidy funds to the budget and collect funds from the contractor.

At the end of last year, the Interdepartmental Coordination Council on State Financial Control in the Republic of Tatarstan approved the “Conclusion on the results of the analysis and systematization of violations and shortcomings identified by state financial control bodies.” The head of the Control and Audit Department of the Accounts Chamber of Tatarstan, Azat VALEEV, tells us what this document is.

Of course, the main task of state control bodies is to identify violations and shortcomings in the financial and budgetary sphere. However, this is only one side of the work of controllers. The second, no less significant, is the prevention of deviations from accepted standards and violations of laws. It is no secret that in some cases financial violations are committed due to ignorance of the new norms of budget legislation, therefore preventive and educational work is simply necessary.
In this regard, control activities pay special attention to work aimed at preventing violations. For this purpose, a Conclusion was prepared in Tatarstan, which systematizes the most common violations and shortcomings in the activities of budgetary institutions. The conclusion was prepared based on an analysis of the results of audits conducted by the Accounts Chamber, the Treasury Department of the Ministry of Finance of the Republic of Tajikistan, territorial departments of the FAS and Rosfinnadzor. This document is intended for managers and accountants of budgetary institutions. It contains more than 400 specific examples of characteristic violations and deficiencies. Information about them is systematized in the relevant sections and subsections; in some cases, links to regulatory documents are provided. Today we will look at typical violations in the execution of the budget for expenditures (Table 1), cases of inappropriate and ineffective use of budget funds (Tables 2, 3), violations in the field of state and municipal procurement (Tables 4, 5), as well as in the implementation of construction and repair work (Table 6). For ease of perception of information, all data is summarized in tables.

Table 1 Budget execution by expenditure

Violation

Comments

Failure to communicate (untimely delivery) to recipients of budgetary funds notifications about budgetary allocations, limits of budgetary obligations

According to Art. 221 of the Budget Code (as amended in force on January 1, 2008), the budgetary institution’s estimate is drawn up, approved and maintained in the manner determined by the main manager of budgetary funds in charge of the budgetary institution, in accordance with the general requirements established by the Ministry of Finance RF. General requirements for the procedure for drawing up, approving and maintaining the budget estimate of a budgetary institution were approved by Order of the Ministry of Finance of Russia dated November 20, 2007 No. 112n

Violation of the established procedure for drawing up and approving the budget estimate of a budgetary institution

Acceptance of monetary obligations in excess of the established limits of budget obligations

Table 2 Examples of ineffective spending of budget funds

Violation(deficiencies)

Comments

Lack of demand for equipment, inventory and other material assets purchased from budget funds

The principle of effectiveness and efficiency in the use of budget funds is prescribed in Art. 34 of the Budget Code. This principle means that when drawing up and executing budgets, participants in the budget process, within the budgetary powers established by them, must proceed from the need to achieve specified results using the least amount of funds or achieve the best result using the amount of funds determined by the budget. The need for the recipient of budget funds to ensure the effective use of the budget allocations provided for him is also enshrined in Art. 162 Budget Code

Payment for design and survey work that does not find practical use in the future

Purchase of goods, works, services for state and municipal needs at prices significantly higher than the market average

Distribution of equipment, inventory and other material assets acquired from budget funds, without analyzing the actual needs, as a result of which material assets are used ineffectively

Formation of overdue accounts receivable, failure to take measures to collect them

Acquisition of inventory items not required to perform the functions assigned to the institution

Non-use of budget funds received on the basis of an application for a long time

Failure to utilize budget funds when there is a need for them

Purchase of materials and equipment of inadequate quality

Payment of penalties (fines) as a result of failure to take measures to repay accounts payable

Failure to take into account the priority and feasibility of construction or reconstruction of a particular facility when allocating funds for capital investments, as a result of which the final result of the use of budget funds is not achieved

Table 3 Examples of misuse of budget funds

Violation

A comment

Use of budget funds for purposes that do not comply with the conditions for their receipt

The principle of targeting and targeted nature of budget funds is formulated in Art. 38 of the Budget Code. This principle means that budget allocations and limits on budget obligations are communicated to specific recipients of budget funds, indicating the purpose of their use. Failure to comply with this principle entails misuse of budget funds

Payment for goods, works, services not according to the corresponding budget classification codes

Unlawful transfer by the recipient of budget funds of cash balances from budget accounts to an off-budget account or to the accounts of legal entities

Use of budget funds to pay for expenses not provided for in the budget of income and expenses

Use of budget funds to pay for expenses that should be financed from extra-budgetary sources

Use of budget funds to pay for work and services not related to the activities of a budgetary institution, to provide financial assistance to commercial and non-profit organizations or to create them

Table 4 Violations when placing orders

Violation

Examples/notes

Failure to comply with the deadlines for publication in the official printed publication and posting on the official website of information about placing orders

A notice of an open auction is published in the newspaper 11 days before the closing date for filing applications for participation in the auction.

According to Part 1 of Art. 33 of the Federal Law of July 21, 2005 No. 94-FZ “On placing orders for the supply of goods, performance of work, provision of services for state and municipal needs” (hereinafter referred to as Law No. 94-FZ), a notice of an open auction is published in the official printed publication and posted on the official website no less than 20 days before the deadline for submitting applications for participation in the auction.

There are also cases of untimely posting of trading protocols and requests for quotations on the official website, as well as publication of trading protocols in the official printed publication

Inconsistency of the information contained in the tender (auction) documentation with the information specified in the notice of bidding

There are discrepancies between the tender documentation and the notice posted on the official website regarding the timing of the provision of services:

According to part 6 of Art. 22 of Law No. 94-FZ, the information contained in the tender documentation must correspond to the information specified in the notice of an open tender

Violations by members of the commissions of the procedure for selecting bidders, requesting quotations, unreasonable admission (or refusal of admission) of a procurement participant to participate in bidding, requesting quotations

The commission allowed a procurement participant to participate in the competition who did not submit an extract from the Unified State Register of Legal Entities as part of the application.

According to part 3 of Art. 25 of Law No. 94-FZ, an application for participation in a competition must contain an extract from the unified state register of legal entities received no earlier than six months before the date of posting on the official website of the notice of an open competition or a notarized copy of such an extract.

Establishment in the competition documentation of criteria for evaluating applications for participation in the competition not provided for by Law No. 94-FZ

According to part 4 of Art. 28 of Law No. 94-FZ (as amended on March 1, 2009) in order to determine the best conditions for the execution of the contract proposed in applications for participation in the competition, the competition commission must evaluate and compare such applications based on the contract price and other criteria specified in the competition documentation . In addition to the contract price, the criteria for evaluating applications for participation in the competition may be:

– functional characteristics (consumer properties) or quality characteristics of the product;

– the quality of work, services and (or) qualifications of the competition participant when placing an order for work or provision of services;

– costs of operating the product;

– costs of product maintenance;

– terms (periods) of delivery of goods, performance of work, provision of services;

– the period for providing a guarantee of the quality of goods, works, services;

– the scope of providing quality guarantees for goods, works, and services.

According to Part 6 of the above article, the use of other criteria for evaluating applications for participation in the competition is not allowed

Publication in an official printed publication or placement on the official website on the Internet of information about placing orders, subject to such publication or placement in accordance with the legislation on placing orders, in violation of the requirements of Law No. 94-FZ

The absence in the notice of an open tender of the quantity of goods supplied, the volume of work performed, or services provided.

According to paragraph 4 of part 4 of Art. 21 of Law No. 94-FZ, the notice of an open tender must indicate the subject of the state or municipal contract, indicating the quantity of goods supplied, the volume of work performed, and services provided. An exception is cases when, during a competition for the right to conclude a state or municipal contract for the performance of maintenance and (or) repair of machinery, equipment, provision of communication services, legal services, it is impossible to determine the required number of spare parts for machinery, equipment, the scope of work, services .

The absence in the competition documentation of a procedure for assessing and comparing applications for participation in the competition, which does not make it possible to make the assessment of applications from competition participants objective.

According to Part 4 of Article 22 of Law No. 94-FZ, competition documentation must contain the procedure for evaluating and comparing applications for participation in the competition

Establishment of requirements for participants in placing an order not provided for by Law No. 94-FZ

The tender documentation for the subject of the competition “maintenance and supply of spare parts for motor vehicles” establishes requirements for participants in placing an order that are not provided for by Law No. 94-FZ. Namely: the organization must have a license for this type of work.

However, according to Federal Law No. 128-FZ of August 8, 2001 “On licensing of certain types of activities,” activities related to the subject of the competition are not subject to licensing. Art. 11 of Law No. 94-FZ establishes an exhaustive list of requirements for participants in placing an order during bidding, and no one has the right to change or supplement it

Conclusion of state and municipal contracts on conditions that do not correspond to the applications of procurement participants and bidding documentation or the announced conditions of the request for quotations

For example, the terms of the concluded contract regarding the end of the delivery period for goods and the payment procedure do not correspond to the conditions specified in the auction documentation:

The method of placing an order does not comply with the law. Concluding state and municipal contracts with a single supplier (performer, contractor) without holding tenders or requesting quotes

The method of placing an order with a single supplier was incorrectly chosen when the amount of the order for the supply of goods (works, services) of the same name under one contract or under several contracts (and other documents confirming the conclusion of a transaction) during the quarter exceeds the maximum amount for cash payments.

Cases of placing an order with a single supplier (performer, contractor) are established in Art. 55 of Law No. 94-FZ.

The method of placing an order by requesting quotes was used when the amount of contracts for the performance of goods (works, services) of the same name, subject to payment within one quarter, is more than 500 thousand rubles.

Failure to enter information about state and municipal contracts into contract registers

Customers do not always send (or send, but not in a timely manner) information about contracts, including information about the execution (termination) of a contract, to the bodies authorized to maintain a register of state (municipal) contracts.

The procedure for entering information into contract registers, as well as the procedure for maintaining registers, is established by Art. 18 of Law No. 94-FZ, Decree of the Government of the Russian Federation of December 27, 2006 No. 807

Lack of a local legal act defining the work procedure of commissions for placing orders

According to part 2 of Art. 7 of Law No. 94-FZ, the customer, the authorized body must decide to create a commission for placing orders, determine its composition (including the chairman) and the procedure for work

Absence (inadequate maintenance) of a register of purchases made without the conclusion of state and municipal contracts

According to Art. 73 of the Budget Code, budgetary institutions are required to maintain registers of purchases made without the conclusion of state (municipal) contracts, which must contain the following information:

– short name of the purchased goods, works and services;

– name and location of suppliers, contractors and service providers;

– price and date of purchase

Table 5 Execution of state and municipal contracts

Violation

Examples/notes

Unlawful change in the terms of state (municipal) contracts

Contracts unlawfully change the quantity (volume) of goods (work, services) and, accordingly, the price per unit, the delivery time of goods (performance of works, services)

Exceeding the established advance limit

According to the opinion of the Ministry of Economic Development of Russia (letter dated May 2, 2007 No. 6121-АШ/Д04 “On measures to prevent adverse consequences from the actions of unscrupulous suppliers (contractors, performers) under state and municipal contracts”), the establishment of advance payments under state or municipal contracts is the right, but not the obligation of the customer, the authorized body (unless otherwise provided by the legislation of the Russian Federation).

Taking into account the fact that receiving an advance payment is in some cases the main purpose of concluding a contract on the part of an unscrupulous supplier (contractor, performer), the need to transfer an advance payment should be carefully analyzed in each specific case

Violations of the terms of state (municipal) contracts, both on the part of suppliers (contractors, performers) and on the part of customers

For example:

– untimely payment by the customer for goods supplied, work performed, services rendered;

– delivery and acceptance of goods with characteristics, quantities and prices that do not comply with the terms of the contract;

– violation of the terms of delivery of goods, performance of work, provision of services established by the contract

Lack of control on the part of the customer over the fulfillment of obligations under contracts. Failure to file claims against suppliers (contractors, performers) who have violated contract deadlines

In case of improper fulfillment of the terms of the contract, customers do not always present claims to the contractor for damages and payment of penalties for each day of delay in case of non-compliance with the deadline for delivery of work established by the terms of the contract

Table 6 Repair, construction and installation work

Violation

Financing of capital investments in the absence of approved design and estimate documentation

Overestimation of physical volumes of work (including payment for work and costs that were not actually carried out), repeated payment for the same work

Payment by the customer for work and costs not provided for in the contract and design and estimate documentation

Failure of the contractor to comply with design decisions (failure to comply with work technology, unreasonable replacement of some types of materials with others, failure to perform certain hidden work)

Overestimation of costs for unforeseen work, costs for the construction of temporary buildings and structures, additional costs when carrying out work in winter

Payment by the customer of the cost of materials in acts of completed work without confirmation of the actual cost in the case when their cost exceeds the average regional prices, which does not correspond to clause 4.24 of the Methodology for determining the cost of construction products on the territory of the Russian Federation, approved by Decree of the Gosstroy of Russia dated March 5, 2004 No. 15/1

Carrying out capital works (reconstruction) under the guise of current and major repairs

Non-compliance of contracts with legal requirements (violation of paragraph 2 of Article 743 of the Civil Code: the construction contract does not include a condition on the composition and content of technical documentation for construction and conditions on which of the parties is obliged to submit the specified documentation and within what time period; the procedure and terms for providing quality guarantees and terms for detecting hidden defects in constructed objects)

Conclusion of contracts (agreements) with contractors who do not have a license to carry out the relevant work

Failure to comply with the standard construction duration determined by the design documentation

Operation of a building without an acceptance certificate for the completed construction of the facility by the acceptance committee, signed by representatives of Gosstroynadzor and other interested bodies, permission to put the facility into operation, which may pose a danger to the life and health of people

Issues of efficient use of budget funds are always of great importance in the implementation of state (municipal) financial control. Let us recall that the principle of efficient use of funds given in Art. 34 of the Budget Code of the Russian Federation, means that when drawing up and executing budgets, participants in the budget process, within the budgetary powers established by them, must proceed from the need to achieve specified results using the least amount of funds or achieve the best results using the amount of funds determined by the budget.

Apart from the indicated article, there is not a single regulatory document that gives an answer to the question of what is ineffective use of funds. Moreover, neither the Ministry of Finance nor legislators bothered to develop and approve criteria for that same efficiency. In other words, any inspector, when conducting a control activity, determines the degree of effectiveness or ineffectiveness of the use of funds based solely on his own understanding of the term. In this article we will provide an overview of several court decisions regarding control measures in which auditors identified cases of ineffective use of funds. We hope that the material will be of interest to our readers.

Is it possible to apply the provisions of Art. to budgetary and autonomous institutions? 34 BC RF?

As we have already noted, Art. 34 of the Budget Code of the Russian Federation establishes the principle of effectiveness and efficiency in the use of budget funds, which means that when drawing up and executing budgets, participants in the budget process within the established budgetary powers must proceed from the need to achieve specified results using the least amount of funds or achieve the best result using a volume determined by the budget funds.

By virtue of Art. 6 of the Budget Code of the Russian Federation, recipients of budget funds (funds from the corresponding budget) are a government body (state body), a management body of a state extra-budgetary fund, a local government body, a local administration, a government institution under the authority of the main manager (manager) of budget funds, having the right to receive and (or) fulfill budgetary obligations on behalf of a public legal entity at the expense of the corresponding budget.

Since neither budgetary nor autonomous institutions are recipients of budget funds, the requirement to comply with what is enshrined in Art. 34 of the BC RF, the principle of efficiency cannot be applied to them. This conclusion was reached by the Ninth Arbitration Court of Appeal in decisions dated December 1, 2015 No. 09AP-42351/2015, 09AP-42588/2015.

In addition, in paragraph 23 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated June 22, 2006 No. 23 “On some issues of application by arbitration courts of the norms of the Budget Code of the Russian Federation” it is explained: when assessing the compliance of participants in the budget process with this principle, the courts must take into account that participants in the budget process within the framework implementation of the tasks assigned to them and, within the limits of budget funds allocated for certain purposes, independently determine the need, feasibility and economic justification for carrying out a specific expenditure transaction. In this regard, a specific expenditure operation can be recognized as an ineffective expenditure of budget funds only if the control body will prove

It turns out that in order to draw a conclusion about the ineffective use of funds, the auditor must collect and attach to the report documentary evidence confirming the fact of the violation.

Is paying fines and penalties an ineffective measure?

The subject of the proceedings in the AS ZSO (Resolution dated October 6, 2015 No. A27-20425/2014) was a complaint from the Federal State Institution “Main Bureau of Medical and Social Expertise in the Kemerovo Region” (hereinafter referred to as the institution) to the Territorial Office of Rosfinnadzor in the Kemerovo Region (hereinafter referred to as the institution) in the section - management).

Based on the results of the audit of the financial and economic activities of the institution for 2013, an act dated July 10, 2014 was drawn up, from the content of which it follows that in violation of the requirements of Art. 34, 162 of the Budget Code of the Russian Federation, federal budget funds in the amount of 90,611 thousand rubles. sent by the institution to pay a fine for late return of rented premises (27,312 thousand rubles), interest for the use of other people's funds (38,055 thousand rubles) and for late payment for reimbursement of utilities and operating services (9,244 thousand rubles .), state fees for legal costs (16,000 thousand rubles).

Let us recall that a penalty (fine, penalty) is an amount of money determined by law or contract that the debtor is obliged to pay to the creditor in the event of non-fulfillment or improper fulfillment of an obligation, in particular in case of delay in fulfillment. Upon a request for payment of a penalty, the creditor is not obliged to prove the infliction of losses on him (Clause 1 of Article 330 of the Civil Code of the Russian Federation). An agreement on a penalty must be drawn up in writing, otherwise it is invalid (Article 331 of the Civil Code of the Russian Federation).

In accordance with Part 1 of Art. 395 of the Civil Code of the Russian Federation for the use of someone else’s funds due to their unlawful retention, evasion of their return, other delay in their payment or unjustified receipt or savings at the expense of another person, interest on the amount of these funds is subject to payment. It should be noted that, unlike a penalty, interest on the use of someone else’s funds can be collected even if the specified condition is not included in the agreement (contract).

Based on the inspection report, the department issued a submission dated 08/07/2014 No. 50, in which the institution was asked to take measures to eliminate the causes and conditions conducive to the commission of violations identified by the inspection within 30 days from the date of receipt of the submission. Disagreeing with the inspectors' conclusions, the institution went to court.

In refusing to satisfy the institution’s request to invalidate the above-mentioned submission, the courts relied on this. Established Art. 34 of the Budget Code of the Russian Federation, the principle of efficient use of budget funds means that when drawing up and executing budgets, participants in the budget process, within the framework of the budgetary powers established by them, must proceed from the need to achieve given results using the least amount of funds (frugality) and (or) the need to achieve the best result using the volume of funds (effectiveness) determined by the budget.

According to Art. 162 of the Budget Code of the Russian Federation, the recipient of budgetary funds ensures the effectiveness and targeted nature of the use of the budgetary allocations provided for him.

Based on the meaning and content of these legal norms, the courts noted that the costs of paying a fine for late return of rented premises, interest for the use of other people’s funds and for late payment for reimbursement of utilities and operating services, as well as legal expenses are not considered a given result of activity institutions, and spending on these needs is ineffective.

Taking into account the above, the amounts of any fines and penalties paid by the recipient of budget funds may be considered ineffective.

Payment for travel on a business trip in excess of the established amount

According to Art. 168 of the Labor Code of the Russian Federation, the procedure and amount of reimbursement of expenses associated with business trips to persons who have entered into an employment contract to work in federal government bodies, employees of state extra-budgetary funds of the Russian Federation, federal government agencies are determined by regulatory legal acts of the Government of the Russian Federation. In turn, the procedure and amount of reimbursement of expenses associated with business trips to persons who have entered into an employment contract to work in state bodies of the constituent entities of the Russian Federation, employees of state institutions of the constituent entities of the Russian Federation, persons working in local governments, employees of municipal institutions are provided for by the regulatory legal acts of the bodies state authorities of the constituent entities of the Russian Federation, local governments. The procedure and amount of reimbursement of expenses related to business trips to employees of other employers are determined by a collective agreement or local regulations, unless otherwise established by the Labor Code, other federal laws and regulatory legal acts of the Russian Federation.

Taking into account the above, we note that state (municipal) institutions, when sending employees on business trips, are required to be guided by the standards for reimbursement of travel expenses approved by the Government of the Russian Federation, state authorities of the constituent entities of the Russian Federation or local governments. To independently establish such standards even at the expense of funds received from income-generating activities, they not entitled.

For example, for federal government civil servants, expenses for business trips are reimbursed according to the standards given in paragraph 21 of Decree of the President of the Russian Federation of July 18, 2005 No. 813 “On the procedure and conditions for business trips of federal government civil servants.” For persons who are not federal civil servants, but working in institutions financed from the federal budget, expenses for business trips are reimbursed in the amounts established by Decree of the Government of the Russian Federation dated October 2, 2002 No. 729 “On the amount of reimbursement of expenses associated with business trips in the territory of Russian Federation, employees of organizations financed from the federal budget" (hereinafter referred to as Resolution No. 729).

When checking the correctness of reimbursement when sending employees on business trips, inspectors always pay attention to compliance with established standards. So, according to paragraphs. “c” clause 1 of Resolution No. 729, expenses for travel to the place of business trip and back to the place of permanent work are reimbursed in the amount of actual expenses confirmed by travel documents, but not higher than the cost of travel:

  • by rail - in a compartment carriage of a fast branded train;
  • by water transport - in the cabin of the V group of a sea vessel of regular transport lines and lines with comprehensive passenger services, in the cabin of the II category of a river vessel of all lines of communication, in the cabin of the I category of a ferry vessel;
  • by air - in the economy class cabin;
  • by road - in a public vehicle (except taxis).
However, it should be noted that by virtue of clause 3 of Resolution No. 729, expenses exceeding the amounts established by clause 1 of this document, as well as other expenses related to business trips (provided that they were made by the employee with the permission or knowledge of the employer) are reimbursed by organizations for by saving funds allocated from the federal budget for their maintenance, and at the expense of funds received by organizations from entrepreneurial and other income-generating activities. Consequently, an institution has the right to exceed established standards with the permission or knowledge of the head of the institution. However, such expenses may be recognized ineffective.

The Resolution of the Ninth Arbitration Court of Appeal dated 02/01/2016 No. 09AP-55065/2015 considered the complaint of the Federal State Treasury Institution “Directorate for the Construction and Operation of Rosgranitsa Facilities” (hereinafter in the section - institution) to Rosfinnadzor regarding the invalidation of the order dated 06/04/2015 No. AS -03-24/3438.

As established by the court, Rosfinnadzor, from 03/11/2015 to 04/07/2015, conducted an audit of the use of federal budget funds in 2013 - 2014, including those aimed at implementing the federal target program “State Border of the Russian Federation (2012 - 2020)” (State program of the Russian Federation “Ensuring state security”), at the Institution.

During an audit of the use of federal budget funds in 2013 - 2014, Rosfinnadzor identified facts of acceptance and reimbursement of expenses to employees for the period to and from the place of business travel at the actual cost of air travel in business class cabins and reimbursement of expenses for the use of lounges for officials and delegations at airports (VIP lounges), as well as unreasonable reimbursement of travel expenses to and from the place of work of persons whose work is of a traveling nature, without approval of the procedure and amount of reimbursement of travel expenses for employees by local regulations of the institution.

Thus, during the audit, it was revealed that during the audited period, the expenses of employees of the institution for travel to the place of business trip and back were accepted and reimbursed at the actual cost of air travel in business class cabins and the expenses of using the lounges of officials of delegations at airports (VIP lounges) were reimbursed ).

In connection with the above, Rosfinnadzor concluded that the institution violated the principle of efficient use of budget funds established by Art. 34 BC RF.

Based on the results of the consideration of the case, the court concluded that the institution in 2013-2014 violated the principle of efficient use of budget funds established by Art. 34 of the Budget Code of the Russian Federation, in terms of acceptance and reimbursement to employees of travel expenses to and from the place of business travel at the actual cost of air travel in business class cabins and reimbursement of expenses for using the lounges of officials of delegations at airports (VIP lounges).

At the same time, the court noted that clause 1 of Government Resolution No. 729 provides for reimbursement of travel expenses to the place of business travel and back in the amount of actual expenses confirmed by travel documents, but not higher than the cost of air travel in an economy class cabin.

Thus, payment of expenses of this category must be made regardless of the category of the institution’s employees.

When considering the institution’s argument about the consent of a higher authority (Rosgranitsa) to reimburse travel expenses to the place of business trip and back in business class, the court took into account that the institution sent memos long before sending employees on a business trip, and also without attaching supporting documents of absence of economy class air tickets, or the impossibility of acquiring them. In addition, the memos do not contain information about the person traveling, the place and time of the business trip, as well as information substantiating the actual reasons for the need for business class flights, etc.

Taking into account the fact that the reports are based on the personal desire of the head of the institution to fly business class, and also taking into account the lack of documents confirming the impossibility of purchasing economy class tickets, which is expressly provided for by Resolution No. 729, the institution’s reference to the consent of Rosgranitsa was rejected by the court.

Thus, paying the cost of both travel and accommodation on a business trip in excess of the established norms without attaching supporting documents of the absence of tickets according to the established norms (at the established cost of living or in the case of living in a room other than a one-room room) or the impossibility of purchasing them may be considered ineffective.

In conclusion, we note once again: when assessing the compliance of participants in the budget process with this principle, the courts must take into account that participants in the budget process, within the framework of implementing the tasks assigned to them and within the limits of budget funds allocated for certain purposes, independently determine the need, feasibility and economic justification for carrying out a specific expenditure transaction . In this regard, a specific expenditure operation can be recognized as an ineffective expenditure of budget funds only if the control body will prove that the tasks assigned to the participant in the budget process could be completed using less funds or that, using the amount of funds determined by the budget, the participant in the budget process could achieve a better result.

The completion of budget execution operations in the current financial year is carried out in the manner established by the financial authority (the management body of the state extra-budgetary fund) in accordance with the requirements of this article.

2. The completion of operations by the Federal Treasury authorities for the distribution in accordance with Article 40 of this Code of revenues of the reporting financial year between the budgets of the budget system of the Russian Federation and their transfer to the corresponding budgets is carried out in the first five working days of the current financial year. These operations are reflected in the reporting on the execution of budgets for the reporting financial year.

3. Budgetary allocations, limits on budgetary obligations and maximum funding volumes of the current financial year cease to apply on December 31.

Until the last working day of the current financial year, inclusive, the body providing cash services for budget execution is obliged to pay budget obligations authorized for payment in the prescribed manner within the limits of the balance of funds in the single budget account.

4. The balances of budget funds not used by recipients of budget funds that are not in a single budget account, no later than the last two working days of the current financial year, are subject to transfer by recipients of budget funds to a single budget account.

5. Unused as of January 1 of the current financial year, interbudgetary transfers received in the form of subsidies, subventions and other interbudgetary transfers with a designated purpose, with the exception of interbudgetary transfers, the source of financial support for which are budgetary allocations from the reserve fund of the President of the Russian Federation, are subject to return into the budget revenue from which they were previously provided, during the first 15 working days of the current financial year.

(see text in the previous edition)

(see text in the previous edition)

The adoption by the chief administrator of the budget of a constituent entity of the Russian Federation (local budget), the budget of a state extra-budgetary fund of a decision on the presence (absence) of a need for the interbudgetary transfers specified in paragraph one of this paragraph that were not used in the reporting financial year, as well as their return to the budget to which they were previously provided, when a decision is made about the existence of a need for them, they are carried out no later than 30 working days from the date of receipt of the specified funds in the budget from which they were previously provided, in accordance with the report on the expenditures of the corresponding budget, the source of financial support of which is the specified interbudgetary transfers generated and submitted in the manner established by the chief administrator of the budget of a constituent entity of the Russian Federation (local budget), the budget of a state extra-budgetary fund.

(see text in the previous edition)

In accordance with the decision of the chief administrator of the budget of a constituent entity of the Russian Federation (local budget), the budget of a state extra-budgetary fund on the existence of a need for interbudgetary transfers received in the form of subsidies, subventions and other interbudgetary transfers that have a designated purpose, with the exception of interbudgetary transfers, the source of financial support which are budgetary allocations of the reserve fund of the President of the Russian Federation, not used in the reporting financial year, agreed upon with the relevant financial authority, the management body of the state extra-budgetary fund in the manner determined by them, funds in an amount not exceeding the balance of the specified interbudgetary transfers can be returned in the current financial year into the budget revenue to which they were previously provided, for financial support of budget expenditures corresponding to the purposes of providing the specified interbudgetary transfers.

(see text in the previous edition)

The procedure for making decisions provided for in paragraph four of this paragraph is established by regulatory legal acts of the Government of the Russian Federation, the highest executive body of state power of a constituent entity of the Russian Federation, municipal legal acts of local administration regulating the procedure for the return of interbudgetary transfers, respectively, from the budgets of state extra-budgetary funds of the Russian Federation, budgets of constituent entities of the Russian Federation Federation, budgets of territorial state extra-budgetary funds, local budgets.

(see text in the previous edition)

In the event that the unused balance of interbudgetary transfers received in the form of subsidies, subventions and other interbudgetary transfers with a designated purpose, with the exception of interbudgetary transfers, the source of financial support of which is the budgetary allocations of the reserve fund of the President of the Russian Federation, is not transferred to the income of the corresponding budget, indicated funds are subject to recovery to the budget from which they were provided, in the manner determined by the relevant financial authority, the management body of the state extra-budgetary fund, in compliance with the general requirements established by the Ministry of Finance of the Russian Federation.

(see text in the previous edition)

Collection of unused interbudgetary transfers provided from the federal budget is carried out in the manner established by the Ministry of Finance of the Russian Federation.

5.1. Budgetary allocations of the reserve fund of the Government of the Russian Federation for the provision of financial assistance to the budgets of the constituent entities of the Russian Federation by decision of the Government of the Russian Federation are subject to increase in excess of the volumes provided for by the federal law on the federal budget for the current financial year, to the extent of subsidies not used as of January 1 of the current financial year and other interbudgetary transfers with a specific purpose, returned to federal budget revenues and not taken into account when approving the total volume of federal budget revenues.

8. Balances of funds of the federal budget (budget of a constituent entity of the Russian Federation) in foreign currency formed as of January 1 of the current financial year in accounts opened by the relevant financial authority in an authorized organization or other specialized organization performing the functions of a general agent (agent) of the Government of the Russian Federation, the highest executive body of state power of a constituent entity of the Russian Federation for servicing state external debt obligations, are not subject to transfer to a single account of the corresponding budget and are used in the first ten days of January of the current financial year to make cash payments.

9. The balances of funds from the federal budget and the budget of a constituent entity of the Russian Federation, not used by recipients of budget funds, located in special accounts opened in accordance with the terms of agreements with international financial organizations, are not subject to transfer by recipients of budget funds to a single budget account and are subject to use by them in the current financial year for the same purposes.

Russian Prime Minister Dmitry Medvedev announced the need to toughen penalties for governors for failure to use budget subsidies. According to him, regional heads must bear personal responsibility. “A number of decisions made recently indicate that not in all cases this kind of sluggishness and ineffective work should be forgiven. Therefore, firstly, I urge all governors to think about how they will implement these rules,” Medvedev said.

At a meeting with deputy prime ministers of the Russian Federation, Prime Minister Dmitry Medvedev heard information from Deputy Prime Minister Dmitry Kozak, who reported that as of January 1, the regions did not use 72.2 billion rubles. federal subsidies allocated to them in 2015 428 billion. According to budget legislation, in case of violation of the terms of the agreement on the allocation of subsidies, the region must pay a fine and eliminate the shortcomings. Subjects of the Russian Federation must return unused funds before April 1.

In connection with this information, Medvedev proposed tightening the personal responsibility of governors for the ineffective use of federal subsidies. He called for every leader of “our territories, our region, region, republic to feel personal responsibility for all financial decisions that he makes, including the use of federal funds.” “Very often our colleagues think this way: if we don’t use it this year, we’ll use it next year, they’ll forgive us, they’ll reschedule if we’re late, they’ll decide to relax the rules, and so on. I want to draw your attention: enough is enough. And a number of decisions made recently indicate that not in all cases this kind of sluggishness and ineffective work should be forgiven. Therefore, firstly, I urge all governors to think about how they will implement these rules,” Medvedev said.

According to him, in the event of violations of financial discipline by regional authorities, the Russian government will “come up with appropriate proposals, as was done in relation to, for example, dilapidated housing, which is well deserved and objective.”
Let us recall that earlier, for disrupting the program of relocating citizens from emergency housing, the governor of the Trans-Baikal Territory, Konstantin Ilkovsky, was dismissed, and the head of Karelia, Alexander Khudilainen, was reprimanded.

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Transbaikal region

The President dismissed the Governor of the Trans-Baikal Territory, Konstantin Ilkovsky. The formal reason for the dismissal was Ilkovsky’s personal statement “about early termination of powers.” However, one of the real reasons for the resignation was the failure in the region of the federal program for relocating citizens from dilapidated housing. Experts talk about a whole range of problems that led to Ilkovsky’s dismissal. Vladimir Putin appointed the speaker of the regional legislative assembly, Natalya Zhdanova, as acting governor.

Republic of Karelia

The head of Karelia, Alexander Khudilainen, was reprimanded by Russian President Vladimir Putin. This is due to violations committed by Khudilainen during the implementation of the program to resettle citizens from dilapidated housing. Earlier, the Minister of Construction of the Russian Federation, Mikhail Men, reported to the President about the problems in implementing this program in Karelia and Transbaikalia. Putin then demanded to find out the state of affairs in the regions and make decisions, including “personnel matters.” Today Putin dismissed the Transbaikal governor Konstantin Ilkovsky.

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