The role of budgetary planning tools in improving the effectiveness of budgetary expenditures

The principal directions to increase budgetary management efficiency are:improving budgetary process, developing program budgets, ensuring economic growth stimulation by close coordination of budgetaryexpenditures with the priorities of budgetary policy, expanding application field of target program planning method, developingdepartmental target programs, that should be aggregated into long-term target programs, increasing responsibility and independence ofauthorities of different levels. These directions presuppose the formation of a procedure that estimates budgetary expenditureseffectiveness and its involvement in the budgetary process. The efficiency of all budgetary appropriations should be estimated. Theestablished Program of budgetary expenditures effectiveness increase until 2012 requires operation improvement in all directions. Themajor direction of budgetary planning improvement is operation based on the principles of a responsible budgetary policy. The clearlyspecified targets and priorities of the state policy become the foundation of budget formation and budgetary expenditures are closelycoordinated with concrete and measurable results of executive authorities activities. One of the most important conditions of economicgrowth and effective use of budgetary funds is the acceleration of government payroll restructuring. The mechanism of budget financingis inefficient. The change of budgetary institution status enables to stimulate the improvement of budgetary expenditures effectiveness.The state (municipal) tasks tool is connected with the operation of the budgetary institutions. It is expedient to define service qualityrequirements within the scope of service standardization. The formation of state (municipal) liabilities register is also the tool ofbudgetary planning and it simplifies the process. The service standards presuppose cost characteristic and, accordingly, financing ofrendering of this service. It is economically sound to normalize not all service expenditures but those, which directly depend on thenumber of consumers or volume of work performed. The allowance can be used towards variable costs. In relation to fixed costs it isnecessary to consider that the amount of service rendered is independent from the utility expenditures, in particular expenditures onheating. Consequently, the cost of service should be calculated on the basis of combination of different formation principles. Theintroduction of three types of budgetary institutions in 2011 will require other principles of operation of budgetary institutions with theexpanded scope of rights, because they should repay as they will participate in reception of state (municipal) order and offer service onthe commercial basis.

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