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Increasing the Efficiency of Budget Expenditure on Funding Public Institutions and Management Of Public Unitary Enterprises
Increasing the Efficiency of Budget Expenditure on Funding Public Institutions and Management Of Public Unitary Enterprises
Volume II
Management Issues and Tasks of Regulation in the Sphere of Public Unitary Enterprises
Moscow
2003
The first volume contains a detailed analysis of the current legal regulation of functioning of state agencies, legislative basis of their budget financing. In this volume specific features of these issues in social sphere are analyzed, as well as recommendations on reorganization of the management system and financing of state agencies, and on reform of organizational and legal forms of their performance are provided.
Analysis of the current organizational and legal forms and specific instruments of management of public unitary enterprises, analysis of the mechanism and funding issues and the ways of reorganization of the system of public unitary enterprises as well as development of policy proposal represent major tasks in the second volume.
Obtained findings can be applied as part of a legislative basis of state regulation (including for amendments to the current normative and legal acts and for the drafting of new normative and legal documents); for development of economic programs for Russia; as specific element for a concept of long-term development of the national corporate model.
Volume I. Perfection of the System of Management and Funding of Budget Institutions
Authors – Batkibekov S., Grebeshkova L., Dezhina I., Zolotareva A., Kitova E., Kostina E., Kuznetsova T., Rozhdestvenskaya I., Sinelnikov-Murylev S., Shishkin S.
Volume II. Management Issues and Tasks of Regulation in the Sphere of Public Unitary Enterprises
Authors – Kokorev А., Kuzyk M., Malginov G., Radygin А., Simachev Yu., Tatarinov А.
The research and the publication were undertaken in the framework of CEPRA (Consortium for Economic Policy, Research and Advice) project funded by the Canadian Agency for International Development (CIDA).
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Editors: Mezentseva К., Serianova S.
Computer make-up: Yudichev V.
ISBN 5-93255-117-8
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Publisher license ID № 02079 of June 19, 2000
5, Gazetny per., Moscow, 103918 Russia
Tel. (095) 229–6736, FAX (095) 203–8816
E-MAIL – info @iet.ru, WEB Site –
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Table of contents
INTRODUCTION
1.ANALYSIS OF EXISTING ORGANIZATIONAL-LEGAL FORMS AND SPECIFIC INSTRUMENTS OF MANAGEMENT UNITARY STATE ENTERPRISES
1.1. QUANTITATIVE ANALYSIS OF UNITARY STATE ENTERPRISES IN RUSSIA
1.1.1. General survey of the place of unitary state enterprises among subjects of management
1.1.2. Dynamics and structure of state enterprises by forms of property ownership and branches in the 1990s
1.1.3. Dynamics and structure of unitary state enterprises after adoption of the Concept of managing state property and of privatization of 1999.
1.2. LEGISLATION REGULATING THE STANDING OF UNITARY STATE ENTERPRISES
1.2.1. A general survey of legislation regulating the legal status of state unitary enterprises
1.2.2. Analysis of specific forms of managing state unitary enterprises
1.2.3. Analysis of specific forms of managing state unitary enterprises
1.3. CONCLUSION
2. FINANCES AND MECHANISMS OF FINANCING UNITARY STATE ENTERPRISES (SUE) (LEGAL REGULATION, MECHANISMS, PROBLEMS)
2.1. INTERNAL AND ESTERNAL SOURCES AND MECHANISMS OF FINANCING UNITARY STATE ENTERPRISES (SUEs)
2.2. RELATIONS OF UNITARY STATE ENTERPRISES AND BUDGET SYSTEM
2.3. BASIC VIOLATIONS ARISING IN THE SPHERE OF THE FINANCIAL RELATIONS OF STATE ENTERPRISES WITH THE STATE
2.4. PROBLEMS AND LEGAL NORMS FOR RESTRUCTING OF BUDGETARY INDEBTEDNESS
2.4.1. Brief analysis of possible mechanisms for settling the problem of non-payments
2.4.2. Analysis of the mechanism for restructuring budgetary indebtedness as a priority instrument for the financial recovery of insolvent enterprises
2.5. CONCLUSION
3. ANALYSIS OF WAYS OF REORGANIZING THE SYSTEM OF UNITARY STATE ENTERPRISES
3.1. EVALUATION OF THE LEGAL REGULATION OF RIGHTS OF THE STATE AS PROPERTY OWNER
3.2. A GENERAL CONCEPT OF INSTITUTIONAL REFORM OF THE STATE SECTOR
3.3. GENERAL VECTORS AND PROSPECTS FOR TRANSFORMATION OF A PART OF THE SUEs INTO OTHER ORGANIZATIONAL-LEGAL FORMS AND MODIFICATION OF THE STATUS OF SUEs
3.4. REORGANIZATION OF THE LEGAL STATUS OF STATE UNITARY ENTERPRISES (SUEs): THE CONCEPT OF THE LAW
3.4.1. The importance of the adoption of the law
3.4.2. The basic problems of regulation in respect to State unitary enterprises
3.4.3. The concept of the draft law
3.5. RECOMMENDATIONS ON THE ALTERATION OF THE EXISTING NORMATIVE BASE DETERMINING THE FUNCTIONING THE FUNCTIONING OF THE SYSTEM OF INTERACTION BETWEEN THE STATE DIRECTORIAL BODIES AND STATE UNITARY ENTERPRISES
3.5.1. The refinement of the model contract with the directors of state unitary enterprises
3.5.2. Elaboration of the model charter of state unitary enterprises
3.5.3. Reorganization of the system of control over the activities of the directors of State unitary enterprises
3.5.4. Professional certification of the directors of state enterprises and the introduction of a contest-based system of their appointment
3.5.5. The use of the programmes of the development of enterprises as a mechanism for their management by state bodies
3.6. CONCLUSION
4. THE PROBLEMS OF MANAGING UNITARY ENTERPRISES IN RUSSIA’S REGIONS (AS EXEMPLIFIED BY KRASNODAR KRAI)
4.1. STATE UNITARY ENTERPRISES OF KRASNODAR
4.2. MUNICIPAL UNITARY ENTERPRISES OF THE CITY OF KRASNODAR
4.2.1. Composition, departmental subordination and sectoral make-up
4.2.2. Basic normative and legal acts and basic regulating procedures (creation of MUEs, relations with the city budget, activity planning, reporting)
4.2.3. The rights and duties of MUEs, regulation of the activity of their directors (the procedure of hiring and dismissing, range of responsibility, basic control procedures)
4.2.4. Financial and economic results of the activity of municipal unitary enterprises in 2001-2002
4.3. MUNICIPAL UNITARY ENTERPRISES OF THE CITY OF SOCHI
4.3.1. Composition, departmental subordination and sectoral make-up
4.3.2. Basic issues of functioning (the procedure for nominating senior officials, reporting, and relationship with the city budget)
4.3.3. Disposal of the profits of municipal unitary enterprises, the issues of financing the public sector enterprises and their programmes of development in the city in the years 2001-2002
4.3.4. The financial status of municipal enterprises providing housing and communal services, and the problems of financing the city’s housing and communal services
4.4. Conclusion
5. PRINCIPAL CONCLUSIONS AND PRACTICAL RECOMMENDATIONS
ANNEX 1. FEDERAL LAW УON STATE AND MUNICIPAL ENTERPRISES WITH PROPOSED AMENDMENTФ
ANNEX 2. AMENDMENTS TO THE MODEL CONTRACT WITH THE DIRECTOR OF A FEDERAL STATE UNITARY ENTERPRISE
ANNEX 3. AMENDMENTS TO THE MODEL CHARTE OF A FEDERAL STATE UNITARY ENTERPRISE
ANNEX 4. BASIC DIRECTIONS OF CONTROL AND AUDIT OF THE ACTIVITY OF THE SUEs OF THE CITY OF MOSCOW AND THEIR PECULIARITIES
- THE PECULIARITIES OF CONTROL OVER THE FINANCIAL AND ECONOMIC ACTIVITY OF SUEs
2. THE ORGANIZATION OF AUDITING OF THE FINANCIAL AND ECONOMIC ACTIVITY OF SUEs IN MOSCOW
3. CONCLUSION AND PRACTICAL RECOMMENDATIONS CONCERNING FURTHER IMPROVEMENT OF THE CONTROL OVER THE ACTIVITY OF THE STATE (MUNICIPAL) ENTERPRISES OF SUBJECTS OF THE RF
ANNEX 6. LABOUR CONTRACT WITH THE DIRECTOR OF A STATE UNITARY ENTERPRISES OF KRASNODAR KRAI
ANNEX 8. TERMINABLE LABOUR CONTRACT WITH THE DIRECTOR OF A UNITARY ENTERPRISE OF THE CITY OF KRASNODAR
ANNEX 9. INTERNATIONAL EXPERIENCE: STATE-OWNED UNITARY ENTERPRISE IN THE COUNTRIES OF WESTERN EUROPE
1. STATE-OWNED ENTERPRISES AS A CONSTITUENT OF A DEVELOPMENT MODEL EUROPEAN UNION COUNTRIES
- TRENDS OF STATE SECTOR DEVELOPMENT IN WEST-EUROPEAN UNION COUNTRIES
3. ORGANIZATIONAL FORMS OF STATE-OWNED ENTERPRISES
4. LEVEL OF SUBORDINATION OF STATE-OWNED ENTERPRISES
5. MANAGEMENT SYSTEM OF STATE SECTOR ENTERPRISES
6. STATE-OWNED ENTERPRISES ACTIVITY CONTROL
7. FINANCIAL RELATIONS BETWEEN ENTERPRISES AND THE STATE
Introduction
Gradual elimination, based on economic growth revival, of the consequences of the 1998 financial and economic crisis was the most important trend in Russia’s development during the past three years. A new stage in economic transformations within the ongoing reforms the onset of which can be traced back to the middle of the year 2000 has put into focus the necessity of and the opportunities for achieving the goals of modernizing the national economy and finding solutions to social problems. It has in fact become a common notion that this would be impossible without overcoming the weakness of the State system and making it function at a higher quality level.
An important component of State regulation as applied to the sphere of property relations is State property management (or participation in such management). In the approved by the Russian Government in the autumn of 1999 Concept of the management of State property and privatization in the Russian Federation, as well as in УThe Main Directions of the Socio-Economic Policy of the Government of the Russian Federation in a Long-Term PerspectiveФ approved in the summer of 2000, three principal types of the objects of such policy were distinguished: 1) State unitary enterprises (SUE) and institutions; 2) economic entities with participation of the State; 3) immovable property. As can be seen from this list, State-owned enterprises are logically a priority object for State regulation in the sphere of property relations.
Considering the known reduction in the role of privatization in generating the budgetary system’s revenues in recent years, the problem of efficient management of State property is becoming especially important. At the same time, the reform of State property management cannot be limited to providing the State with revenues from sources other than taxes. As regards the sector of unitary enterprises, the task of a more high-quality execution of their State functions and satisfying public interests, rationalization and higher quality of budgetary policy (both in expenditures and revenues) is now becoming a greatest priority.
Keeping a considerable number of enterprises (including strategic ones) in State ownership, transferring property rights from one subject of administration to another (without changing the status of State property), and inter-department conflicts all directly influence the efficiency of the currently active enterprises, and indirectly – the general economic situation in Russia.
The main goals of the present study are to make an analysis of the existing forms and methods of managing State unitary enterprises and to prepare appropriate recommendations to be applied to the present Russian situation.
At the beginning of the study, the sector of unitary enterprises is analyzed from a quantitative point of view (including their dynamics and structure), as well as from the standpoint of the existing schemes of their management (Chapter 1). Later on, in Chapter 2, the financial problems associated with the performance of SUEs on a broad scale are dealt with (the ratios of different sources, the relationships between enterprises and budgets, the principal instances of law violations associated with these, the issues of restructuring the debts to the budgetary system).
In Chapter 3, on the basis of an estimation of legal regulation of the State property rights and the concept of reforming the State sector, possible approaches to and the ways of reorganizing the sector of unitary enterprises are analyzed, including an evaluation of the prospects for transforming some SUE into other organizational and legal forms, revealing positive and negative aspects of one of the draft laws dealing with this problem, and recommendations for changing the existing normative and legal base. The latter include amendments to the draft law on unitary enterprises which is currently being developed, final development of the Model Charter of a federal state unitary enterprise and the Model Contract with its director, as well an analysis of control and audit procedures for unitary enterprises (as exemplified by subject of the RF) (Annex 1-4). Chapter 4 is devoted to an overview and analysis of the management practice as applied to unitary enterprises at a local level (as exemplified by subject of the RF) supplemented by samples of corresponding normative and legal acts pertaining to this problem (Annex 5-8). One more appendix reviews a cumulative foreign experience of the performance of State enterprises (as exemplified by West European countries) (Annex 9).
The results obtained can be applied as follows:
- as elements of the legislative base for State regulation (including amendments to the existing normative and legal acts, as well as development of new normative and legal documents),
- to prepare programmes for Russia’s development for various timespans;
- as a specific element of the concept of developing a long-term model of the national corporate sector.
Potential users of the projects’s results can be the Government of the RF, the State Duma of the Federal Assembly of the RF, and the Ministry of State Property of the RF.
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