The current national legal and regulatory legislation provides for various sources of funding for a budgetary institution and mechanisms for allocating these funds. Some are mandatory, and the implementation of the rest depends on the capabilities and initiatives of the management of a budgetary institution. In the framework of this article, we will consider the main sources of financing the activities of a budgetary institution.
Finance: essential characteristics
To answer the question of what is the source of financing of budgetary institutions, consider the concept of finance of a budgetary institution.
Finance is a monetary relationship that is associated with the distribution and redistribution of the value of the social product and part of the state we alth.
If we talk about finance in principle, it should be noted that they are based on two functions: distribution and control.
Intensively taking part in the distribution and redistribution of state income, the allocation of financial resources helps to change the proportions that have appeared in the processinitial distribution of government revenue, in relation to its final use.
Income acquired in the process of this redistribution should ensure consistency between resources, between the size of money funds and their structure, on the one hand, and the size and structure of means of production and commodities, on the other.
The redistribution of state income in Russia is taking place in the interests of the structural restructuring of the state economy, the development of the most important sectors of the economy (agriculture, transport, energy, military production) in favor of the poorest segments of the population (the elderly, students, single mothers and families with many children).
As a result, the redistribution of state income occurs between the production and non-production spheres of the state economy, branches of material production, some regions of the state, forms of belonging and social groups of the population.
The ultimate goal of the distribution and redistribution of state revenues and GDP, which is carried out with the help of money, is the development of productive forces, the creation of market economy structures, the strengthening of the country and the provision of the highest quality of life for the general population.
The special place of budget finances in the monetary system is determined by the position that these organizations take to ensure the functions of the country.
The essence of budgetary institutions and their classification
To reply tothe question of what is the source of funding for budgetary institutions, consider the very definition of this institution.
A budgetary institution is an organization that was created by Russian state structures, local administrative bodies in order to perform managerial, socio-cultural, scientific, technical or other functions. The funding framework for such an institution is based on an estimate of income and costs.
These companies can be classified according to a number of circumstances. Classification by function, i.e., to perform a number of types of work, it is possible to subdivide them in accordance with the multifunctional systematization of budget costs.
Based on this, we can distinguish companies that perform the functions of the state and, at the same time, receive funds.
- State administration, which includes the Russian Committee for Financial Monitoring, the Russian Committee for Military-Technical Cooperation with Foreign States, the Russian Accounts Chamber, the Russian Ministry of Finance, etc.
- Judicial branch.
- Embassies and consulates abroad, etc.
Depending on the source of financing of a budgetary institution, they are divided into the following groups:
- from the federal budget;
- at the expense of the budgets of the constituent entities of the Russian Federation;
- at the expense of local budgets.
There are other types of classifications.
According to the sources of funding of a budgetary institution, these organizations can be divided into two groups:
- institutions that provide paid services to citizens and organizations and, at the same time, have their own sources of funds;
- institutions that do not provide paid services to citizens and organizations do not have their own sources.
Features of finance
An important feature that is taken into account when determining the sources of funding for budgetary and autonomous institutions is the connection with the budget, through which they are provided with the necessary finances. The inability to receive funds from the budget leads to underfunding of the costs of budget companies. Overfulfillment of the budget estimate of the corresponding level of income leads to additional receipt of the main sources of financing of budgetary institutions and the allocation of funds for such institutions.
With the help of this function, the money of budgetary companies is in even closer connection and interdependence with municipal (centralized) money than all other parts of the monetary system. Institutions can provide paid services, forming part of their own financial resources at the expense of their own income, which allows them to be treated as business entities. The types and sources of financing of a budgetary institution include own funds generated through the provision of certain paid services.
These two features determine the place of finance of budgetary institutions as an intermediate one: between municipal money and company money.
Basic principles of organizing finances
The main principles for organizing the allocation of sources of funding for institutions are as follows:
- Target use and use of allocated and own funds.
- Clear delineation of budget financing and own funds. Both groups of funds are kept in certain accounts, each group has its own assessment and reports.
- Budget immunity. In accordance with Art. 239 of the RF BC, immunity of budgets is a legal regime in which the foreclosure of funds from the treasury is carried out only on the basis of a court act: o reimbursement of underfunding if the compensated funds were approved by law within the framework of budget expenditures; o compensation for losses caused to an individual or organization as a result of illegal actions of municipal bodies or their leaders.
- Control by the state and local authorities over the motivated and optimal use of enterprise financing sources.
The role of the budget in financial provision
The central source of financing is the budget allocation of funds. It is based on certain principles, characterized by the forms and methods of providing funds.
Principles of budget financing are very important in the organization of the system of allocation of funds for institutions. Among them, we highlight:
- getting the most effect with the least expense;
- target character;
- providing funds from the treasury in moderationimplementation of production and other indicators, taking into account the use of issued appropriations;
- irrevocability of budget allocation of financial resources;
- free allocation of funds.
There are two ways to source funding for activities:
- The system for allocating financial resources "net budget". This method of providing funds is characterized by the fact that the provision of funds occurs for a fairly limited range of costs that were provided for by the approved budget.
- Provision of funds under the "gross budget" system. It is used for companies that are fully provided with the necessary finances from the budget.
These methods of providing funds are carried out with the introduction of the following forms and sources of financing of a budgetary institution:
- Allocations for the maintenance of the activities of institutions that are identified by the list of costs.
- Funds to pay for products that are made by individuals and organizations under municipal and state contracts: all purchases of products, works and services in the amount of more than 2000 minimum wages are carried out only on the basis of municipal or state contracts.
- Transfers to the population, in other words, the allocation of funds for mandatory payments for the population: pensions, scholarships, other social benefits, which were established by acts of the subjects of Russia, legislative acts of local structures.
- Subventions and subsidies to citizens and organizations - fundsprovided to the budget of another level of the Russian system in order to fulfill certain target costs on the basis of equity financing.
The concept of budget financing
Budget financing is a gratuitous earmarked allocation of funds to institutions, organizations, companies for the implementation of their main work from the relevant budgets in accordance with the approved budget for the department.
Budget financing is applied to municipal facilities and is based on the principles of targeted use of funds, reasonableness of costs, and verification of monetary discipline.
Budget financing is an organized system of providing funds to municipal (state) companies, organizations and institutions for the implementation of their work.
The essence of such financing lies in the fact that with its help certain monetary relations appear between municipal and economic entities of all forms of ownership in relation to the direction of budget funds.
Municipal and state non-production institutions that do not have their own income, all their costs for the current maintenance and expansion of work are covered from the budget on the basis of monetary plans - cost estimates.
The completeness and timeliness of the allocation of funds significantly depend on the level of filling with budgetary funds.
In Russia, municipal funds are directed in different ways and for different purposes. Most of the fundsis distributed and spent through the allocation of finance with the help of budget financing, in which funds are provided for the implementation of current activities and works. The provision of funds applies mainly to municipal facilities and is made at the expense of various sources of financing of budgetary institutions: from the budget, from extra-budgetary funds and own finances.
Budget funding is based on the principles of gratuitousness, targeted use of funds, compliance with monetary discipline (as a condition for appropriate and legal spending of funds).
In Russia, budget funds are available in two forms:
- funding public institutions;
- financing state associations and companies that have a certain financial independence.
Public companies and organizations do not take a specific role in the development of we alth, which means they do not generate government revenue.
The main purpose of such institutions is to meet the social needs of the population.
The current legislation of Russia allows commercial activities for all these companies (but only in relation to those types of work that are provided for by the charter of these institutions), which brings them additional income.
Forms of budget financing
The allocation of funds is made in the following forms:
- financing of funds based on monetary plans (or estimatescosts);
- subventions;
- government financing of investment funds;
- providing subsidies;
- provision of subsidies.
Estimated funding is the most popular form of funding. The allocation of funds from the budgets is based on a planning document - an assessment of the income and costs of the company (institution). The estimate is the main planning document that confirms the right to receive income and expenses. The estimate describes the size and direction of funds to solve the tasks.
A subvention is the allocation of municipal funds by the state.
A subvention, unlike subsidies, is focused on providing funds for certain programs, activities, and projects. It is produced if there is a share of own sources of financing of funds of budgetary institutions from local (city, for example) budgets. There is one feature of the use of subventions - they can be returned in case of improper use.
The state allocation of investment funds is the provision by the state of the necessary funds for innovative and research work.
This provision of funds is made in accordance with the budget systematization of costs in the main directions of the country's development.
Subsidies are current payments (gratuitous) to organizations, companies that do not provide for reimbursement in the form of specially agreed payments.
Government subsidies are a form of budget financing,used to distribute funds from the municipal and local budgets to planned unprofitable companies and organizations to effectively balance their cash flows.
Grants may also be provided from a higher level of the budget (in case of costs that exceed income) to support work.
When making purchases at the municipal level, the sources of financing for a budgetary institution in the register of contracts are subsidies and subventions.
Methods of budget financing
In order to fulfill budget financing, two methods are used:
- Method of transferring funds. It is made by transferring finances to the accounts of the main managers of financial institutions.
- The single treasury account method, which is the main municipal account and is used for cash transactions.
Funding from the budget can also be combined with lending from the budget. The current legislation of the country describes the provision of loans to other levels of government, including municipal non-budgetary funds, the provision of loans to companies, institutions and organizations.
Types of sources of financing the expenses of budgetary institutions
Let's consider where cash flows can come from. From the above, two main types of sources of financing the expenses of budgetary institutions can be distinguished:
- budget provision of finance;
- own funds.
Budget provision of finance -this is the provision by a non-reimbursable organization of the amount from the budgets of various levels and extrabudgetary funds to cover the costs.
Own funds of institutions consist of various sources of financing the activities of a budgetary institution:
- funds acquired from the rental of premises, facilities and equipment;
- funds from commercial and other income-generating work;
- trust funds of legal entities and individuals;
- other income.
Institutions' own funds may be grouped in accordance with the general authorization to open an account with the Federal Treasury to account for funds received from commercial and other income-generating work:
- Funds from the institution's paid work that match its profile.
- Funds from the production work of workshops, experimental sites, farms, printing houses, shops, catering units that do not have the status of an organization.
- Funds from the provision of services under financial contracts.
- Funds purchased in the form of fees for the maintenance of children in kindergartens, etc.
- Funds for R&D and service delivery.
- Profit from telecom services.
Budget subsidy: basic understanding
It is considered mandatory for any institution that must receive it from the founder along with the established state or municipal task. Its size is determined by the founder onbased on the following reasons:
- when calculating the subsidy, the costs of a budgetary institution for the maintenance of property and property are taken into account;
- calculation of the subsidy is done taking into account the standard costs for the provision of municipal or city services to individuals and organizations.
Regarding the cost of maintaining property, the subsidy (in other words, its guaranteed part, which practically does not depend on whether the institution provides any services or not), takes into account the position of the founder and may not cover all the costs of the institution. For example, for institutions of the general state budget, these costs include only ten percent of the total cost of electricity and fifty percent of the cost of heat consumption.
Regarding the part of the subsidy that relates to the allocation of funds for the process of providing services, it includes both the direct costs of the institution for the provision of the service (for example, labor costs for personnel specifically involved in the provision of the service) and indirect costs (in in particular, the remuneration of the administrative staff of the institution). These may include property maintenance costs.
If, within the framework of the state task, a budgetary institution provides services to citizens and organizations for a certain fee, then, as a rule, funds planned for receipt are deducted from the funds planned to be received from buyers of services. As a result, it is very important for the management of a certain budgetary institution to know, on the basis ofwhat regulatory - legislative act its founder determines the amount of subsidies for municipal tasks. It is necessary to be aware of the rules for calculating the standards: what costs and in what proportion are attributed to subsidies of the guaranteed part (price of property maintenance), and which - to the variable (price of services).
This is necessary in order to be able to influence the amount of the subsidy, which is determined by the founder, protecting the interests of the institution, since the rules are often violated for the founder due to a budgetary shortfall.
But it must be agreed that even without this, in financial planning, the founder has many opportunities to reduce the size of the subsidy, while maintaining the size of the characteristics of the state task.
Furthermore, it is not uncommon for legislative acts to state that the amount of standard costs for the provision of services is not required to exceed the amount of budgetary appropriations that were provided for the corresponding tasks in a certain budget for the corresponding monetary year.
Therefore, in this case, the only way to keep the subsidy at least at the same level is to reassure the manager of the budgetary institution that lowering the standards will lead to the failure of this task or the need to increase the amount of payment for the services that were provided by the institution.
It is also important to understand that the reduction by the founder of the amount of standards within the limits of the subsidy for the implementation of the state or municipal task may cause a situation where a budgetary institution, for one reason or another, does notwill fully use this subsidy.
In accordance with national acts, grant funds that were not used in the current financial year remain in the institution and are used in the next financial year to solve the problems for which the institution was organized.
The goals of creating a budgetary institution are the implementation of works or the provision of services to ensure the capabilities of municipal bodies or local administrative bodies in the field of science, education, he althcare, culture, social security, employment of residents, sports, and also in other areas.
The unused subsidy for the implementation of the state task in the current year must be spent by the budgetary institution in the next, and this may encourage the founder to reduce the size of the standards and norms for subsidies.
Budget subsidy for purposes not related to state tasks
The provision of these subsidies to municipal institutions is provided for by national acts. As opposed to a subsidy for financial support for the implementation of government tasks. The issue of its provision is decided by the founder, and the procedure for calculating the amount and conditions is established for national institutions by the Cabinet of Ministers of Russia, in relation to city institutions - by the local administration.
The main information element of these legislative acts, not related to the implementation of the state task, is that budgetary institutions receive these subsidies from the founder.
In practice, their goals may vary:
- these subsidies could beprovided for the purchase of fixed assets (including real estate);
- for overhaul and refurbishment;
- for resource saving measures;
- for the implementation of various types of work within the target program;
- for staff training and development;
- to implement court decisions;
- to pay off accounts payable;
- for anniversary events;
- to implement activities related to the launch of an institution, etc.
As a result, subsidies for other tasks are a mechanism for providing budget investments (treasury funds) that are allocated to create or increase the price of state or municipal property at the expense of treasury funds.
In line with local regulations, there are two practical ways to determine the extent of these subsidies.
Firstly, the amount of the subsidy is set by the founder on the basis of the planned cost of the necessary products, taking into account the limits that were provided by the founder in accordance with the territorial budget.
In the second method, an application for a subsidy is additionally applied, which is submitted to the founder. It indicates the title of the costs, their target direction, amount, and the necessary justifications are also given.
The head of a budgetary institution should carefully study the relevant legislation in order to understand what exactly he can be given subsidies for.
Extrabudgetary sources
To off-budgetsources of funding in budgetary institutions include those revenues that exist outside the budget. They are regulated by the legislation of the Russian Federation.
These funds are classified into groups: earned income and unearned income.
Earned income refers to those funds that are not received from the main activity of the institution, but which are associated with it.
Such sources of financing of extra-budgetary funds of a budgetary institution have a characteristic feature - a designated purpose. That is, they can only be used for the needs of the organization itself.
Unearned income is those finances that are not related to the activities of the institution and the results of its work, are not subject to return.
Extrabudgetary sources also include deposits that are temporarily at the disposal of the institution, but under certain conditions, these amounts are subject to return. These include: salary not received on time, scholarships, etc.
Term on deposits:
- for individuals – 3 years;
- for legal entities - 1 year;
- for budgetary institutions - until December 31.
Issues of taxation of extrabudgetary sources
Extrabudgetary sources of funding and taxation of budgetary institutions are also regulated by law. Budget institutions are tax payers. This tax is paid on income received from the sale of paid services, from rent, etc. This is business income.
The tax base is determined as the difference between the amount of income received (excluding VAT) and the amountactual expenses.
Conclusion
Subsidies under study are targeted. Therefore, the targeted use of subsidies by the institution is the object of control. A common practice is to draw up subsidy agreements. These agreements establish the obligation of the institution to apply the grant only for its intended purpose and the right of the founder to terminate the grant in case of misuse of funds and make efforts to restore this amount.
