Upon request of the Administration of Stavropol Krai the CFP implemented the project Analysis of the Reports of the subjects of budgetary planning on Results and General Directions of Activities (RRGDA) of Stavropol Krai. Delivering of training and consulting program based on this analysis to finance managers of the Krai administrations. These Reports are submitted according to the regulation # 249 of the GoRF issued in May 22, 2004 and shall include the following sections:
(i) General information,
(ii) Goals and tasks of activity,
(iii) Expenditure obligations and revenue formation,
(iv) Results of activity,
(v) Expenditure allocation goals, tasks, and programs,
(vi) Results of the budget expenditures.
USAID provided the CFP with additional funds within the USAID program Reform of intergovernmental fiscal relations and public finance policy in Russia . The CFP has been part of the program since 2003. At the beginning of the reform the CFP concentrated on (i) assistance to the federal agencies in its decentralization efforts and (ii) in identification and resolution of fiscal/financial issues of local governance reform. Since 2003 the CFP has focused on capacity building of regional and local governments in areas as public finance management, strengthening of local governance by establishing transparent system of regional/municipal transfers, and financing of public services on regional and local levels.
The new CFP project aims to improve finance management practices in a pilot municipality (municipal district – rayon or city district – gorodskoi okrug) in the Far East. The pilot municipality will be selected in December 2006.
The CFP provided technical assistance to the Department of Finance, Budget and Procurement of Smolensk region (oblast) in implementation of the second phase of the Regional fiscal reform program. By the results of the 2nd phase Smolensk region was rated the second, and the prize amounted to 60.277 million of rubles out of 642 millions allocated by the Ministry of Finance among eight winning regions in the form of subsidies
Financing of public services team of the CFP has published Calculation of normative for planning and financing general school educational programs: Experience of practical implementation, Methodological recommendations, and Comments
Conferences and seminars
Conferences on the transition to normative-based financing of education marked the completion of the two CFP projects. The conferences were organized in partnership with Federal Education Agency, Institute for Public Finance Reform and the CFP.
To learn more about the projects:
Promotion of Education Reform results: Transition to normative-based financing of education
Analysis, generalization and promotion of the promising practices in (i) implementation of regional normative-based systems of financing of education, and (ii) regional teacher compensative systems
Leonid Bogdanov spoke at the conference Governance improvement within the framework of allocated responsibilities: the case of North-West federal okrug. The conference was held on November 17, 2006 in St. Petersburg. Mr. Bogdanov presented the first results and new issues of the transformation to performance-based budgeting.
The CFP delivered one-week training to regional and municipal finance managers of Khanty-Mansiysk autonomous okrug – Yugra. The CFP delivers training in themes as mid-term financial planning on regional and local levels, procurement policy on both levels, education and health reforms, etc.
The last seminar out of the series of the training seminar for the North Caucasus regions was held in November 13-17, 2006 in Petegorsk. The seminar was conducted under the Component 1 of the Technical assistance to the North Caucasus regions and was attended by 87 people from all NC regions. The CFP selected trainees for the next phase of the Component, i.e. ‘training of trainers’ which is a part of the ‘capacity building’ strategy of the project.
Round Table for the North Caucasus regions will be held in December 2006. The top issues to be discussed include monitoring of the government’s performance, measurement of the results, transition to performance-based budgeting, normative-based financing of public services, etc. These issues were clearly articulated by Dmitry Kozak, President’s envoy to the Southern federal okrug, as urgent for improvement of socio-economic situation in the Okrug.
Local governance reform
Ministry of Finance of RF posted on its site Results on the monitoring of local governance reform for 9 months of 2006. It reports increase in the number of municipalities from 11733 in 2005 to 24210 in 2006. This includes:
City district (okrug) – 522 (1601 in 2005)
Municipal district (rayon) – 1802 (900 in 2005)
Urban settlement – 1756 (443 in 2005)
Rural settlement – 19894 (8789 in 2005)
Monitoring covered 77 out of 89 regions. Some facts & figures from the summarized report are presented below.
Structure of local budgets revenue:
Tax revenue – 29.7%
Non-tax revenue – 8.4%
Intergovernmental transfers (minus Compensation Fund) – 27.5%
Compensation Fund – 29.8% Other – 4.5%
In local budgets individual income tax comprises 84% out of total amount of tax revenue, the next biggest amount comes from land tax (14.5%) and the rest is made form property and agricultural taxes (1.4 and 0.2% correspondingly).
Regional transfers to local budgets amounted 294 billion of rubles in the form of
federal targeted investment program (1.8%),
and other transfers (10.8%).
Local budgets expenditures:
Administration – 9.1%
Culture – 4%
Other – 10.8%
Communal services – 17%
Health and sport – 13.5%
Education – 36.5%
Social policy – 9.1%
Figures below show local budget balance in 77 regions:
City district (okrug) – 67%
Municipal district (rayon) – 59%
Urban settlement – 29%
Rural settlement – 43%
City district (okrug) – 33%
Municipal district (rayon) – 37%
Urban settlement – 27%
Rural settlement – 19%
City district (okrug) – 0
Municipal district (rayon) – 4%
Urban settlement – 44%
Rural settlement – 38%
Full text of the report (in Russian)
The CFP publications on fiscal aspect of LG: