Program Budgeting As a Tool of Introducing a Higher-Level Performance of the Public Sector of the Economy

BIOSCIENCES BIOTECHNOLOGY RESEARCH ASIA, August 2015. Vol. 12(2), 1329-1338

Program Budgeting as A Tool of Introducing a Higher-level Performance of the Public Sector of The Economy

Arsen Azidovich Tatuev1, Elena Vyacheslavovna Lyapuntsova2, Askerbiy Arsenovich Tatuev3, Violetta Valerievna Rokotyanskaya2 and Zalina Nurmuhamedovna Zhankazieva1

1Kabardino -Balkarian State University named after Kh.M. Berbekov 360004, Kabardino-Balkarian Republic, Nalchik, Chernyshevskogo st., 173 2Moscow State University of Food Production125080, Moscow, Volokolamskoye sh., 11 3North-Caucasian Federal University355035 Stavropol region, Stavropol, Lenin’s st., 133b

DOI: http://dx.doi.org/10.13005/bbra/1788

(Received: 02 March 2015; accepted: 04 April 2015)

In the article the advantages of program budgeting in comparison with the traditional one are dealt with the analysis of state programs of the Russian Federation from the point of view of basic elements of efficiency is carried out, the main problems arising in the course of their development are revealed and measures for their further improvement are suggested.

Key words: budget planning, program budgeting, budgetary policy, efficiency, state programs, budget.

Consecutive introduction of program DISCUSSION budgeting in the budgetary process assumes the change of the state policy and can become the Introducing program budgeting is an main means of modernization of public uneasy process, that presumes, among other administration sector. Application of the program things, a reform in the system of government format allows making the formation of the budget management. The transition to program budgeting strategic both financially reasonable and also requires a number of essential changes in the considering various options of realization of financial activity of the government: state programs which need further improvement, a) Revising and reforming the financial regarding the formulation of the purposes, use processes; of indicators of an assessment of social and b) Reorganizing management agencies; economic efficiency. c) Achieving more professionalism in financial activity; METHODS d) New proficiencies of the specialists in the public sphere. In the real work on the basis of From this point of view, program functional and dynamic approach the most budgeting can be seen as a set of operations, aimed important directions of state programs efficiency at improving the efficiency and effectiveness of increase which will allow turning them into the the public sector’s performance. According to effective instrument of realization of social and many researches, the introduction of program economic policy of the state are defined. budgeting allows: 0) Obtaining the maximum result (output) from the use of limited financial resources; * To whom all correspondence should be addressed. b) Evaluating more objectively, on the basis of the results obtained and costs entailed, 1330 TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015)

the results of the activity of ministries and implemented, be politically sponsored and agencies, performing their functions or strictly controlled. Moreover, the consistent delivering services within the limits of implementation of program budgeting in the their authorities. budgeting process presumes a change in the In this regard, we can say that program governmental policy and might become the basic budgeting is based on directly associating the tool of reforming the sector of public budget expenditures (the use of the financial administration (Shush & Afanasiev, 2014; Shush resources) and the amount and the quality of the & Borodin & Tatuev, 2014; Shush & Borodin, provided governmental services (i.e. the outcomes 2014). of the performance of ministries and agencies) To obtain more effect from the (Anderson & Anderson & Velandia-Rubiano, implementation of program budgeting, it should 2010; Barro, 1989; Checherita & Rother, 2010). be combined with reforms in the sphere of public The idea of introducing program budgeting is administration and public finance management. based on the advantage of increasing the social The program budget differs from the and economical efficiency and effectiveness of traditional one in that point, that all, or nearly all, budget expenditures. costs are allocated to programs, each of them Unlike the traditional form of allocating being directly associated with a concrete result (line-item) budgeting, program budgeting offers (a strategic outcome) of a ministry’s operations, a number of advantages, which allows: and demonstrates a positive change in the sphere a) Focusing budget expenditures on of an agency’s influence. In this respect, a program politically determined and strategically budget is an opposite to a traditional one, as it is important objectives for social and based on the indicators of the result (immediate economical development of the country; and ultimate), not on the input of the resources. b) Achieving a direct relationship between the Applying the program format allows short-term and the long-term forms of making the formation of the budget strategically budget planning and forecast; and financially justified, and also, to consider c) Providing exact agreement between the different variants of realization of the programs. strategic government’s plans and the However, in practice, it is rarely possible to budget; achieve an optimal combination of both the d) Achieving higher-level accountability of strategic planning and the budget reasonability ministries and agencies in the public sector (Cochrane, 2011; Gale & Orszag, 2003; Groneck, for the targeted and effective use of the 2010; Elmendorf & Mankiw, 1999; Hanson, granted funds; 2007). e) Redistributing resources within the The specifics of the federal budget in the framework of implementing particular Russian Federation are the following, since 2011 programs, as well as in favour of more its program part has been represented by a set of productive and/or priority areas state programs, whose development can be viewed (operations); as an attempt to unite all instruments for achieving f) Carrying out objective evaluation of the the goals of the government’s policy. Today, in efficiency and effectiveness of budget the Russian Federation, there are a lot of high- expenditures on the basis of certain; level governmental tasks, that can be solved only g) Simplifying the structure of the budget; if a number of ministries participate. Such tasks h) Achieving higher transparency of the are essentially complex trends in the state’s policy, budget information and make it more namely, being realized as the governmental accessible, for not only the participants of programs of the Russian Federation. the budget process, but also for the At present, 42 programs have been community/society as a whole. adopted in the Russian Federation, which To make these advantages come true, it constitute 5 core building blocks, they are the is vital that the transition to program budgeting following: the new quality of life, the innovative should be thoroughly prepared and steadily development and modernization of the economy, TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015) 1331 the provision of the national security, the decrease in the formerly predicted incomes. It is proportional regional development, the effective not incidental, that the idea of cutting the state’s state. Still the quantity of the governmental expenditures became the main idea of the Budget programs being implemented and the amount of Message from the President in the year 2013. their financing are being corrected for each Sequestration has touched upon most areas of the subsequent budget cycle (Table1). budget expenditures. The most unlucky turned out As can be seen from the data in Table 2, to be the housing sector, its expenditures were to since 2013, a reduction has been taking place in be cut in the year 2014 by approximately a quarter the program part of the federal budget (37 billion roubles). The expenditures on expenditures, due to the reduction the number of education were also cut by 13% (which makes the governmental programs. In particular, this 88 billion roubles). affected the programs that are heavily financed In this regard it should be noted, that due including the program on the development of the to the complexity of the macroeconomic pension system. Thus, the share of non-program situation a project was developed for optimizing expenditures has increased dramatically, since the the government’s expenditures, which were budgetary appropriations, allocated for the planned to be reduced by approximately 1.1 development of the pension system, were planned trillion roubles; it would mean, among other in the amount of 9320.1 billion roubles. things, a change in the order of funding the Despite the fact that in the end of April pension system and in reforming the sector of 2013 the State Duma adopted amendments to the public administration. It comes naturally, that all Budget Code of the RF (No. 104-FL dated 7/05/ this, along with pessimistic expectations 13), that are necessary for the transition to a concerning the profitable part of the budget, could normal program budget, and these legislative have had only a negative effect on the amounts of changes should have created an incentive to the financing and on the distribution of the resources formation of the federal budget of Russia in the from the budget that are going into the next budget cycle of the years 2014-2016 in the implemented government’s programs. However, entirely program format, it did not happen. In it is not under-financing that is the primary cause addition, the share of program costs of the federal of their low effectiveness, there remains a number budget in 2014-2016 amounted to 56.5%. It has of complex problems and issues, that need a to do with the circumstance that in the previous serious study. year, 2 governmental programs were not approved The basic techniques of program (39 out of 42 state programs from the index were budgeting are mostly analogous to the approaches approved): one – in the sphere of the national employed in the private sector (stating the mission defense, another – aimed at the development of and strategies, budgeting from zero, budgeting by the pension system. In connection with that, the the accrue method, the use of indicators for expenditures still remained in the non-program assessing the social and economic efficiency, part of the budget expenditures. It should be developing a system of risk management, taking noted, that in 2014-2016 it was planned to direct risks into account and others), which can be 8141.7 billion roubles to guarantee the viewed as the main elements of the efficiency and development of the pension system, and 8925.3 effectiveness of governmental programs. billion roubles at hidden costs, including the Our analysis gives grounds to say that in provision of the national defense. most cases the governmental programs need Additionally, due to the new challenges further improvement, for instance, in the part of that the deterioration of the world situation poses, identifying the objectives. As an example, we and that limit the domestic possibilities for could point at governmental program 05 “The economical growth, causing a decline in industrial provision of quality and affordable housing and production, the current budget has been seriously related services to the citizens of the Russian modified (Shush & Afanasiev, 2014), as the Federation”, both objectives of which do not project of the federal budget for the years 2014- mirror the requirements of actual guidelines – 2016 was formed under the conditions of a that is, “To make housing more affordable and to 1332 TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015) improve the quality of housing provision to the actual programs in the middle of the year 2014, population” and “To achieve a higher quality and however, the new editions of the programs are reliability of the provision of the housing services far from being perfect, either (http:// to the population”. All this is also true, as far as programs.gov.ru). other governmental programs are concerned, An important trend in program budgeting since it is impossible to regard as concrete, is allocating the expenditures to specific purposes achievable, realistic, and time-specific such goals and evaluating their effectiveness on the basis of as “Guaranteeing the accessibility of medical care measurable parameters. This system is an and improving the efficiency of medical services, especially significant one, providing the fact that that have to match the sickness rate and the needs evaluating the efficiency of budget expenditures of the population, as well as the latest is currently becoming one of the most important achievements of the medical science, in the tools in the budgetary policy of the nation amounts, kinds and quality” (governmental (Keynes, 1936; Kutivadze, 2012; Modigliani, program 01 “The development of health care”); 1961; Moore & Chrystol, 2008; Siti & Mohd & “Creating the legal, economic and institutional Podivinsky, 2013). Its role becomes even more environment, favourable for the effective relevant under the condition that we want to get a development of the labour market” (governmental more transparent federal budget and more program 07 “The support of employment of the involvement of the community in the budgetary population”). The examples given vividly process. demonstrate that a number of the objectives Furthermore, the problem of taking into cannot be recognized as “effective”, and, as it is account the influence of various factors can be commonly known, ineffective goals can easily solved within the framework of building a model “lead in the wrong direction”. You can act of an integral system for assessing the efficiency efficiently; execute all the claimed operations – of governmental programs, a part of which would but still move in the wrong direction. That is why, be assessing the efficiency of budgetary to guarantee the achievement of the desired (pre- expenditures (Sutherland & Hoeller, 2012; planned) outcomes, the goals must be really Schclarek, 2005). effective ones. The task of designing an integral system It cannot be denied, that there are serious of budget expenditures remains one of the most problems with the logical structure of the urgent (Shush, 2011; Shush & Afanasiev, 2013). programs, most of which lack the sections with It is partly connected with the period of financial the information about the interdependence with instability and the distinct trend to the the bordering governmental programs. Besides, disproportional amount of expenditure the controversy on the upper limit of the budgetary obligations of the Russian state, while the overall appropriations to be approved for their budget revenues are decreasing. In such a difficult implementation led to ending up with a trade-off situation in the sphere of public finance, decision in 2013, that permitted the formation developing an effective system of assessing the of all governmental programs in 2 variants/ efficiency within the frames of the implemented scenarios: a basic scenario (within the approved governmental programs will allow revealing the budget for 3 years) and an additional desirable most and the least productive trends in one, which would allow additional amounts of government expenditures, and also, creating a real budgetary appropriations, providing the indicators basis for boosting their effect (Shush & Afanasiev, change in the desirable direction. This led to the 2014). approval of the majority of the adopted According to the authors, a governmental programs in 2 scenarios (a basic governmental program/subprogram can be one and an additional one) in the year 2013. regarded as a set of economic interactions for Moreover, the approved programs differed in achieving various kinds of effects (social, formats, because essential changes had taken place economic), which presumes employing the in the regulatory and legislation basis during that following principles of assessment (Figure 2). time. It caused a substantial restructuring of the It is especially vital to estimate all governmental TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015) 1333 programs from the point of view of the efficiency for the consumers of the government services of budget expenditures. Traditionally, the (organizations and individuals) and for the following criteria are applied for assessment government agencies that implement those (Figure 2). programs. Particularly, the economical effect The above given criteria are closely from the implementation of ecological programs interrelated and indicate different dimensions of can be measured by the increase in the retained the efficiency of social expenditures throughout total cost of natural resources in the territory of the process of developing and executing the their enforcement. program budget. The indicators of social efficiency take The assessment and comparing the into account the social-demographic expenditures with the outcomes are unavoidable consequences from implementing the steps of the for preparing justified solutions that concern the environmental program for the society as a whole; appropriateness of the programs’ implementation. the degree of their usefulness that is characterized The following parameters should be defined: a) by the better health of the community, a decrease the components of the expenditures, b) the in the number of diseases and deaths due to the economic indexes that allow estimating various reduction of harmful substances emissions into elements of the expenses and of the results on the environment. the same scale, c) the net return (the difference The question of the choice of the between the outcomes and the expenditures, indicator s, that are to be included into including the difference between the public the systems of efficiency measurements, is, in benefits and the public expenditures). essence, the question of receiving the feedback The criteria for assessing the impact for further improvement of governmental reflect only the comparison between the results programs (Shush, 2011; Shush & Afanasiev, obtained by means of this amount of expenditures 2013). Apart from the control functions, the and the planned figures at the stage of the important moment that should draw our attention program’s approval. This group of the criteria is that the figure/indicator, in fact, informs us demonstrates the degree to which the goal was what is happening (such as quality, cost, etc.). One achieved, and the extent to which the tasks were must understand why this is happening or – does solved for a selected direction of budget not happen, and this information is to be given by expenditures. Meanwhile, the impact criteria the indicators of efficiency and by nothing else – might not reflect to which extent the that are the measurement of the degree in the implementation of program operations adhered achievement of the planned results, using a certain to the established administrative procedures amount of resources. Another problem in required while carrying out the expenditures, estimating the efficiency is that the neither consider the efficiency with which it was methodologies suggested in the governmental managed to obtain the goal’s achievement or the programs do not have the option of estimating solution to the program’s tasks. The impact can the levels of the indicators depending on the be achieved regardless of the constantly growing amounts of financing (along with the option of budget expenses, that is, to have a “scale effect”, multi-variant calculation for the indicators of as well as without improvement in the quality of efficiency and for the forms of getting the data the public services – or, sometimes, even if the reports). quality deteriorates. The specifics of the objectives, tasks, When evaluating governmental program operations and results of some governmental s, special attention should be paid to calculating programs is in the fact that the effects achieved the indicators of not mere economical efficiency, because of their implementation are indirect, but of social efficiency as well. mediated and deal with not only the promotion in The indicators of social efficiency the spheres of their realization, but also with the reflect financial and industrial results from the level and quality of life of the community, with implementation of the governmental programs, the development of the social sphere, economy, they signify certain economic benefits, equally social security, government agencies and so on. 1334 TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015)

All this does not allow adequately measuring the treatment facilities, of introduction of advanced efficiency of the implemented governmental industrial technologies, introducing waste-free programs. Besides, when evaluating many of the technologies, which can produce a significant governmental programs of the Russian positive impact on the environment and enlarge Federation, special attention should be paid to its biological diversity, improve the assimilative calculating not only indicators of economical capability of the territory (Shush & Afanasiev, efficiency, but also the social ones. If we turn to 2013; Shush & Afanasiev, 2014). Also, it could the Russian practices, we will see that this is be the indicators that characterize the dynamics especially vital for social programs from the in decreasing harmful emissions and sewage. As block “The new quality of life”, such as “The a result, the environment becomes less polluted, assistance to the community with the and, therefore, more resistant to the influences employment”, “The promotion of health care”, of human economic activity. “The progress in education”, “The development The social or ecological efficiency can of the pension system” and others. take forms of limiting or eliminating the negative Let’s see what the specifics of various effect of the economic activity on the society and groups of indicators mean, taking as an example the environment, as well as reveal itself in a higher the implementation of some subprograms level of health of the population and in restoring included into the governmental program the natural resources and elements that are vital “Protecting the environment” for the years 2012- for providing healthy habitat for humans. The 2020 (the block “The new quality of life”), with priority here is to be given to the programs that the amount of expenditures for the year 2014 – are aimed at preventing the pollution of the 31.7 billion roubles, which aims at improving the environment environmental safety and preserving natural It should be highlighted that the biological systems. evaluation of ecological and social efficiency When developing and implementing the should be prior to measuring the economical subprograms with ecological aims (“Regulating efficiency, because the economical effect from the quality of the environment”, “The biological the implementation of the programs is weighted diversity of Russia”, “Hydrometeorology and against social and ecological benefits and losses. monitoring the environment”), it is important that The criteria for evaluating the efficiency the costs should be aimed at achieving specific of budgetary expenditures demonstrate the goals, and their efficiency be estimated on the relationship between the costs and the results basis of measurable indicators. This requires from making the expenditures. Meanwhile, the factoring in a complex of indicators, that allow efficiency of the budgetary expenditures reflect assessing the ecological efficiency as well as the the level of the resources that were required to social and economic efficiency (Shush & achieve particular results. Borodin, 2014). When creating an integral system of The examples of indicators for the measurement of the efficiency and effectiveness ecologically aimed programs are given in Table of the programs, groups of indicators are selected 4. for the criteria, mentioned above, which allow The indicators of ecological efficiency giving quantitative measurement to the program can help to most objectively evaluate the impact activity of a ministry/agency, while conducting of the implemented operations on the condition the program’s operations. of the environment, which could manifest itself Program budgeting presumes creating an in changes for the better in the composition of elaborated system of program’s monitoring and water, air, soil, and in the environment as a whole, evaluation, that need a complex of indicators, to include an increase in the assimilative effective procedures of inside and external capability of the territory. It could also be the control. indicators, that characterize dynamics in the At the same time, it should be decrease of the amounts of polluting emissions highlighted that the techniques for measurement and sewage, as a result of applying highly effective can vary, depending on the orientation of the TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015) 1335 program. For instance, ecological programs are within one program, or even a particular assessed during their implementing, as well as operation, and to measure the achieved results after the list of the programs operations is against the expenses. executed, since the effect from the operations In other words, the contemporary may not be immediate. The assessment has to give concept of program budgeting solves the the opportunity for uncovering the shortcomings, problems of achieving both allocating and mistakes that happened at the stages of economical efficiency of expenditures, that arise development and implementation of the due to the non-market essence of the provision programs. of public services. The results of assessment can be used for analyzing the efficiency and effectiveness of RESULTS the program’s operations. It will provide the opportunity to substantially refine the quality of Specifics of the program budget of the the development of the programs. If the program Russian Federation are dealt with, the main was a multi-year program (which is typical for problems arising in the course of development programs in the ecological sphere), the annual and realization of state programs are revealed and estimation of the achieved outcomes will allow the measures directed at increase of their modifying the operations in the following years. efficiency are suggested. It is proved that the main Additionally, conducting a thoroughly direction of program budgeting is orientation of elaborated procedure of assessment of the expenses at the specific purposes and an efficiency reveals the cause-and-effect relations assessment of their efficiency on the basis of the between the outcomes and the program’s measured indicators that demands creation of operations. At the same time the in-depth analysis complete system of an assessment of state of the outcomes and efficiency of the operations programs efficiency that reveals the most and the bears not only advantages, it has its disadvantages. least effective directions of the public The main advantage is in getting the most detailed expenditures, and also to create real prerequisites and reliable information, the disadvantage comes for increase of their efficiency. On the basis of in financial and time expenses. the analysis of the state programs realized now, Thus, we can conclude that aggregated the criteria of efficiency of the budgetary assessment of the efficiency with which the expenses, such as profitability, productivity, governmental programs are implemented offers productivity are defined. Groups of the indicators an opportunity for an objective, aggregated applied in the system of an assessment of state estimation of the effect from the financial programs efficiency of an ecological orientation resources invested by the state. Systematic are considered and it is revealed that the specifics evaluation of the effectiveness of the of the purposes, tasks, actions and results of some government’s programs is an important state programs such is that and the effects gained instrument of realization of the national policy as a result of its realization are indirect, mediated in a particular area of the government’s activity. and belong not only to development of spheres Additionally, judging by the results of such within which such programs, but also to the level systematic evaluation, there can be suggested and quality of life of the population, development steps for making the programs more effective in of the social sphere, economy, public safety, the any area. state institutes are realized. In this regard Besides, the planning of the budgetary budgeting program assumes creation of the expenditures must not be viewed only as aimed at developed system of monitoring and an achieving an optimal distribution of resources assessment of programs which needs a complex among the goals of the government’s activity. of indicators, effective procedures of internal and Program budgeting presents an opportunity not external control. only to evaluate expenditures for the achievement of some objective, but also to analyze their impact 1336 TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015)

Table 1. The distribution of the budget resources among the core building blocks of the government’s programs in the (billion roubles)*

The quantity of the government’s The amount of financing, programs, by blocks billion roubles 2011- 2012- 2013- 2014- 2011- 2012- 2013- 2014- 2013 2014 2015 2016 2013 2014 2015 2016 yrs yrs yrs yrs yrs yrs yrs yrs

The innovative development and modernization of the economy 17 17 17 17 4710.7 5982.7 5594.3 6210.7 The new quality of life 11 13 12 12 14495.5 18500.8 9749.3 10279.0 The effective state 5 5 5 4 4890.3 4412.7 3378.5 3549.2 The proportional regional development 4 4 5 5 782.5 1890.3 2008.7 2262.6 The provision of the national security 2 2 1 1 2513.2 7660.8 22.4 5.3 The expenditures on the realization of the GP operations of the RF, that are regarded as a government’s secret 2854.9 TOTAL: 39 41 40 39 27392.2 38447.2 20753.1 25162.2

*The source: the official site of the Ministry of Finance of the RF www.minfin.ru

Table 2. The distribution of the budget expenditures by the core blocks of the government’s programs in the years 2011-2016 (billion roubles)*

The expenditures of the 2011-2013 yrs 2012-2014yrs 2013-2015yrs 2014-2016 yrs federal budget of the RF % % % % program 27392.2 80.4 38447.2 93.8 20753.1 48.1 25161.7 56.5 non-program 6679.9 19.6 2522.7 6.2 22467.5 51.9 19348.0 43.5 total 34072.1 40969.9 43220.6 44510.2

*The source: the official site of the Ministry of Finance of the Russian Federation, www.minfin.ru

Table 3. The examples of indicators for assessing the efficiency of ecologically-aimed programs*

The indicators for the system of measuring the efficiency of ecological programs The indicators, factoring in The amount of solid wastes produced per person1 the ecological effect % of produced industrial wastes % utilized industrial wastes % of produced consumption wastes % of utilized consumption wastes % of factories that have improved the indicator of emissions of harmful substances The indicators, factoring % of sickness rate caused by the pollution of the environment in the social effect % of deaths, caused by the pollution of the environment The social effect from the investment into protecting the environment. The indicators, factoring The resource consumption level in the economy in the economical effect The energy consumption indicator of the production The relative proportion of green-labelled products The economical effect from the investment aimed at the protection of the environment. The increase in the value of territories after the environment protection measures The increase in the amount of sanctions for violating the ecological regulations The total sum of economical loss from the deterioration of the environment

* The source: offered by the authors TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015) 1337

THE MAIN ELEMENTS OF AN EFFECTIVE GOVERNMENT’S PROGRAM

CLEARLY IDENTIFYING THE GOAL OF THE PROGRAM

DESIGNING A LOGICALLY CLEAR LAYOUT OF THE PROGRAM

DISTRIBUTING THE RESPONSIBILITY FOR THE OUTCOMES OF THE IMPLEMENTATION OF THE PROGRAM

DESIGNING A SYSTEM OF STIMULATING REWARDS FOR ACHIEVING THE PLANNED INDICATORS

DEVELOPING A SYSTEM OF RISK MANAGEMENT

APPLYING AN EFFECTIVE SYSTEM OF ASSESSING EFFICIENCY

* The source: offered by the authors Fig. 1. The main elements of the effectiveness of governmental programs *

THE PRINCIPLE THE DESCRIPTION

the principle When assessing programs, the priority is given to the one that would bring the biggest economical and social impact. of efficiency

the principle of The effectiveness of the program is estimated from different points of view, at consistency in different stages of its development and implementation, to achieve an aggregated assessment estimation. the principle of The effectiveness is estimated with regard to all indirect additional results, factoring in the economical and social, for instance on the basis of expertise estimates. outside effects (the externals) the principle of full All program operations have to be financed within exactly specified deadlines. financing The absence and lack of financial resources make it equally difficult, or impossible, to either implement or assess the program. the principle The programs must be aimed at solving an entire complex of problems, taking into account the interests of all the participants of the program. of full financing The principle of The results from implementing the programs can manifest themselves not factoring in long-term immediately, but after a span of time – which should be taken into account, while effects (time) assessing the efficiency and effectiveness.

COST EFFECTIVENESS PRODUCTIVITY THE IMPACT

The cost/resource side of the The proportion of the quantity The public expenditures and the efficiency, economically wise of services/tasks and outcomes, achieved by them, decisions, that mean that the the amount of costs have to be compliant with the resources of the required particular goals that should be composition, quality and amount the mission of the public are purchased and used with the sector's activity minimal possible costs

Fig. 2. The criteria for the efficiency of budgetary expenditures, while implementing governmental programs 1338 TATUEV et al., Biosci., Biotech. Res. Asia, Vol. 12(2), 1329-1338 (2015)

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