Misuse of budget funds: responsibility and punishment

The targeted use of budget revenues is established by virtue of Art. 38 BC. It means bringing the appropriations and limits of obligations to specific recipients, indicating the directions of their distribution. Let us further consider cases of misuse of budget funds.

Terminology

The misuse of budget funds is a budget violation. Explained in Part 1 Art. 306.4 BC. According to the provisions of the article, the direction of budget revenues and payment of obligations for purposes that completely or partially do not correspond to those defined in the decision (law) on the budget, budget, list, contract or other document acting as the basis for the provision of these funds is recognized as inappropriate. Violation of Art. 306.1, part 1 BC recognizes non-compliance with the requirements of the Code, legislative and other regulatory acts governing financial legal relations, agreements and other acts in force in this area. It is also considered the inaction / action of the main manager, administrator of funding sources, authorized body, recipient of funds. For the commission of these violations in Sec. 30 BC provides for the application of appropriate coercive measures.

Recipients

The concept of these entities is explained in Art. 6 BC. The following bodies act as recipients:

• State authorities.
• Management of state funds (extrabudgetary).
• Local authorities.
• Municipal administration administered by the administrator.
• State institution.

All of them should have the right to accept or fulfill financial obligations on behalf of the public law organization at the expense of the respective fund. State-financed organization does not act as a recipient. Therefore, it does not apply the provisions of part 1 of article 306.1 BC. However, it is necessary to take into account part 2 of this article, which also mentions the misuse of budget funds. Responsibility for this part occurs for inaction / action that violates the BC, other regulatory documents governing financial legal relations. Coercive measures can in this case be applied to entities that are not their participants. It follows that the misuse of budget funds by a budget institution is also punishable by law.

Types of Violations

A fine for misuse of budget funds may be imposed for:

1. The direction of income to pay expenses that are not stipulated in the plan for financial and economic activities for the reporting year.
2. Unauthorized transfer of funds between budget classification items. In this case, we are talking about the fact that the proceeds provided for spending in one direction are moved to cover costs in the other.
3. Making payments, the closure of which should be made from budgetary funds of another level or extra-budgetary funds.
4. The direction of income to pay for services and work not related to the activities of the enterprise, to assist commercial organizations, cover the costs of another legal entity.
5. The use of funds to pay off utility bills arising from third-party consumers (tenants, etc.) is free of charge.
6. Financing of facilities under construction, including those for which it is not provided for in accordance with the established procedure and which are not included in the relevant lists, as well as costs not specified in the design estimates.
7. The use of subsidies and subventions with non-compliance with the conditions for their provision.
8. Waste of finances from the funds of state executive bodies in the areas provided for in other sections of the balance sheet.
9. Spending funds from profitable activities for goals that are not set in the plan.

KOSGU

In accordance with Art. 18, paragraph 1 of the BC, for the compilation and subsequent execution of revenue-expenditure items used budget classification. It is presented in the form of a grouping of revenues, costs and sources of coverage of deficits. It also includes a classification of operations in the general government sector (KOSGU). The procedure for its application is approved by the Ministry of Finance. In particular, lists of expenses are established for financial departments, which should be attributed to certain sub-articles and articles of KOSGU.

The grouping of operations in this classification is carried out depending on their content. Moreover, in each of the articles and sub-articles there is a brief description of the process. As for costs, the operations in them are characterized by lists of areas of finance spending. For effective planning and proper execution of the budget, issues relating to the reflection of costs under the articles or sub-articles of the KOSGU can be regulated by the budget estimate, state assignment, methodological instructions (recommendations) of the manager and other documents that serve as the basis for receiving the corresponding income.

Inclusion of material assets in the appropriate group non-financial assets (reserves or fixed assets) is the competence of a budgetary institution. It takes one or another decision, guided by instruction No. 157n. This takes into account the purpose of the values ​​and the procedure for their operation.

Ministry of Finance clarifications

In case of misuse of budget funds identified by regulatory authorities, it is necessary to objectively, comprehensively and fully establish the circumstances in their entirety. Such an order is present in the letter of the Ministry of Finance. In addition, the ministry insists on clarifying all the reasons and conditions that contributed to the allocation of costs to one or another sub-article / article in each individual situation.

Exceptions

In the event that the recipient identifies incorrect expenses as sub-articles / articles of the KOSGU after performing a comprehensive analysis, this violation is not considered as misuse of budget funds if:

1. Costs are determined by the estimate or justification attached to it, documents confirming the limitation of obligations, planned and other acts of the main manager with the use of information KOSGU.
2. It is proved that the recipient committed erroneous actions unintentionally.

Misuse of budget funds: liability

It is installed in the Code of Administrative Offenses. In particular, under Art. 15.14 for misuse of budget funds, the punishment for officials is as follows:

1. Disqualification for 1-3 years.
2. Administrative penalty. Its size is 20-50 thousand rubles.

Legal entities are also subject to sanctions. They will have to pay from 5 to 25% of the amount sent for other purposes.

Subsidies

They rely on budgetary institutions in accordance with Art. 78.1, part 1 of the BC. Subsidies are allocated to finance the execution of state or municipal tasks. These revenues are calculated taking into account the regulatory costs for the provision of appropriate services by the organizations and the maintenance of property. Subsidies may also be provided for other purposes. The procedure in accordance with which such financing is carried out is approved by the government, the highest executive structure, the administration of the Moscow Region or authorized bodies of state power and territorial administration.

Subsidies for other purposes, except those allocated for capital investments, are provided in the manner agreed with the Ministry of Finance.Financing is provided by bodies having the powers and functions of the founders. In accordance with the approved procedure, special provisions are provided in which the goals, conditions, size, rules and timing of the allocation of funds are indicated. The agreement between the recipient and the administrator, therefore, acts as the basis for the provision of financing.

PFCD

The above agreement is not the only document that can confirm the misuse of budget funds. The Russian Federation, acting as a rule of law state, in normative acts relating to the financial sector, establishes rather stringent requirements and rules. In particular, the work of organizations that are state-financed is carried out in accordance with the PFD (plan for financial and economic activities). The requirements for this document are established by order of the Ministry of Finance. In accordance with them, PFCD should include such sections as:

1. Data on the activities of the municipal / state institution, including information on the types and goals, the list of services / work performed for a fee.
2. Indicators of the financial position of the organization. This section provides information on assets, liabilities on the last reporting day preceding the date of the plan.
3. Indicators of receipts and payments (planned).
4. Activities for the strategic development of the organization.

Thus, real actions should coincide with planned. The misuse of budget funds is revealed by comparing the information of the PFD and the actual situation.

UK

In addition to administrative penalties are also provided for misuse of budget funds. In particular, they are established in Art. 285.1, part 1 of the Criminal Code. The wording of the crime under this article is similar to that given in the Code of Administrative Offenses. However, in this case, for the misuse of budget funds, the guilty person faces not only the payment of 100-300 thousand rubles in favor of the state, but also:

1. Arrest up to six months.
2. Imprisonment for up to 2 years.
3. Forced labor for up to 2 years.

In addition, the court may prohibit an official from engaging in specific activities or remain at a certain post for 3 years. It is worth noting that these sanctions are applied in case of misuse of funds on a large scale. An amount exceeding 1.5 million rubles is recognized as it. Particularly large will be considered the size of 7.5 million rubles.

Appealing the findings of supervisory services

Often the position of the audited institution does not coincide with the opinion of the authorized supervisory authorities on the legality of spending. Challenging the conclusions of the control service is allowed both in pre-trial procedure and directly in court. The first is usually prescribed in regulatory documents governing the activities of financial supervisory authorities.

In particular, the audited organization may submit written objections to the decisions of the controlling services no later than 5 days (workers) from the date of receipt of the opinion. In its statement, the institution must indicate the specific page of the act with which it does not agree. In addition, the objection contains articles of law proving the organization’s rightness. Comments can also be made out in a table. In one column, the findings of the controllers will be presented, and in the other, the position of the organization being audited. If this does not work, the case will be tried in court.