This presentation was made byIgor YAREMENKO, Ministry of Finance, Russian Federation, at the 15th Annual Meeting of OECD-CESEE Senior Budget Officials held in Minsk, Belarus, on 4-5 July 2019

1. Program and Performance Budgeting in the
Russian Federation
Minsk, Republic of Belarus
July 2019
Meeting of the OECD’s Senior Budget Officials’ regional network for Central,
Eastern, and South-Eastern European Countries
Igor Yaremenko
Ministry of Finance of the Russian Federation

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Evolution of program and performance-based instruments for budget
management
1. Possibility to develop and implement federal (regional, municipal) targeted
programs (starting from 1995):
Addressing priority social, economic, defense, research, environmental, and other key issues that
typically are cross-sectoral in nature.
2. Implementation of agency-level targeted programs is provided for in the federal
budget, subnational budgets, and local budgets (starting from 2007):
Achieving goals, objectives and performance targets of individual bodies of government (local self-
government).
3. Implementation of government (municipal) programs, transition to program-based
budgets:
A set of planned activities that are interlinked by their objectives, implementation periods,
executing agencies and resources, supporting the attainment of government policy priorities and
goals.
4. Incorporation of project management principles: developing and implementing
national, federal, and agency-level projects:
A set of interlinked activities that are aimed at achieving unique results of various scope in an
environment of time and money constraints.
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Problem issues in designing and implementing government programs [1]
1. Poor quality of goal setting and system of indicators:
Goals, performance indicators and expected results are formulated by executing agencies of
government programs and do not reflect specific priorities of government policies;
Excessive number of indicators and lack of their hierarchy  impossibility to evaluate the
effectiveness of government programs, subprograms, and key activities.
2. Absence of a systemic approach in creating a list and structure of government
programs:
A list and structure of government programs correspond to the existing system and structure of
federal executive government authorities.
3. Incomplete assessment of resources and instruments for achieving government
policy goals:
There is no consideration of contribution made to the attainment of government programs’ goals
by such instruments as controlling and supervisory activities, property management, etc.;
application of tax benefits is not evaluated.
Some government programs cover only a portion of federal budget spending for respective sectors
(areas).
Funds of consolidated subnational budgets, state corporations, and government-owned companies
are reflected in government programs only nominally.
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Problem issues in designing and implementing government programs [2]
4. Poor quality of administration of government programs:
Weak interagency communication in managing government program implementation;
Lengthy and labor-intensive procedures for reaching concurrence on government programs and
their implementation plans.
5. Perfunctory nature of performance evaluations of government programs and nonuse
of results of such evaluations:
Absence of an approved uniform methodology for performance evaluation of government
programs;
Lack of established penalties for officials for poor implementation of government programs.
6. Inadequate integration of government programs into the budgeting process:
The role of the executing agency in planning budget expenditures and its responsibility for
spending efficiency and the quality of government program management are nominal in nature.
No possibility to reallocate budget appropriations between government program activities in the
course of budget execution  slow decision making.
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System of strategic program-based planning
What? Who? How?
Strategy of (Concept for long-
term) social and economic
development
Russian Federation’s
long-term budget outlook
Long-term forecast of
social and economic
development
Three-year
budget
Sectoral
strategies
Government programs
Conditions
Goal setting
Authority and
instruments
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Forecast of social and
economic development
for medium term (3
years)
Presidential Decree #204
dated May 7, 2018
National projects

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System of goal setting for Government of Russia activities
Key Areas of Government of Russia Activities Until 2024
Government
program 1
Government
program 2
Government
program 3
National
project 1
Other government policy goals
(including in the areas of security,
international activity, improvement of public
administration, etc.)
National goals
(section 1 of Presidential Decree #204 dated May 7, 2018)
Government
program 4
National project 3
National projects are developed for 6-year terms.
Goals of national projects
National project 2
Government
program N
National project is a priority area of government policy with special management arrangements.
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Ensuring linkages between government programs and national (federal)
projects
1. Segregation, within a government program, of projects (definite
implementation periods, specific achievable outcomes, special
management arrangements) and processes (continuous or perpetual in
nature, no unique outcome).
2. Grouping of projects (can change in the course of their implementation):
Agency-level projects: are approved and supervised by the government
program’s executing body, i.e. a departmental steering committee.
Federal projects (earlier, priority projects) as part of national projects:
are approved and supervised by project committees created for each
national project by the Presidium of the Presidential Council for
Strategic Development and National Projects.
3. Processes – agency-level targeted programs.

8. М ]фМ ]ф
Contribution of project and process activities to the attainment of social and
economic development goals (government program goals)
2017 2018 2019 2020 2021 2022 2023 2024
Indicator values
Years
National
project
Projects
Processes (agency-level targeted
programs)
Agency-level
projects
Processes
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Types of national projects
National project included in the
structure of one government
program
Sectoral national project
National project included in the
structure of several government
programs
Cross-sectoral national project
National project 1
Government program 1
National project 2
Government
program 2
Government
program 3
Government
program 4
Government
program 5
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Correlation between national projects (programs) and RF government programs
Title of national project (program)
Government programs under which national projects (programs) are carried out
Number Title
Health 1 Healthcare Development
Education 6 Education Development; Employment Promotion; Development of External Economic
Activities, etc.
Housing and Urban Environment 1 Providing Affordable and Comfortable Housing and Utilities for Russian Federation Citizens
Environment 7
Environmental Protection; Reproduction and Use of Natural Resources; Forestry
Development; Developing Industry and Improving Its Competitiveness; Developing Nuclear
Power Generation System, etc.
Safe and Quality Roads 3 Ensuring Public Order and Combating Crime; Transport System Development; Strengthening
National Defense Capacity
Science 2 Science and Technology Development; Developing Industry and Improving Its
Competitiveness
Small and Medium Business and Support of
Individual Entrepreneurial Initiative 2 Economic Development and Innovative Economy; Government Program for Agriculture
Development and Regulation of Markets for Agricultural Products, Raw Materials, and Food
Productivity and Employment Support 2 Employment Promotion; Economic Development and Innovative Economy
Digital Economy 10 Information Society; Economic Development and Innovative Economy, etc.
Demography 8
Physical Culture and Sports; Education Development; Social Safety Nets; Employment
Promotion; Providing Affordable and Comfortable Housing and Utilities for Russian
Federation Citizens, etc.
Culture 2 Culture and Tourism Development; Education Development
International Cooperation and Export 5
Aviation Industry Development; External Economic Activities; Developing Industry and
Improving Its Competitiveness; Agriculture Development and Regulation of Markets for
Agricultural Products, Raw Materials, and Food; Culture and Tourism Development

11. An example of segregating “projects” and “processes” within a government
program
Making housing more affordable for citizens
(housing affordability ratio)
Provision of housing for
certain categories of
citizens
Developing a
regulatory
framework for
owner-financed
housing construction
Resettling people from
dilapidated / damaged
dwellings
“projects” “processes”
Housing
stock
renovation
• Division of activities into “projects” and “processes” is conventional and can change with time.
• Similarly to “project” activities, “process” activities should have output indicators, and their
contribution to the high-level ultimate goal should be evaluated (this can be done as part of
agency-level targeted programs).
have definite implementation periods;
lead to a unique result and/or quality changes in
processes.
are continuous or perpetual;
are implemented in accordance with well-
established procedures.
National (federal) projects, agency projects Agency-level targeted programs, individual
activities

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Reflection of “projects” in the budget classification
Government program
Subprogram
(area)
Agencytargeted
program
Subprogram
(area)
ХХ
Government program code
Х
Subprogram code
...
Government program structure Earmarked item
ХХ
Key activity code
... Activities... ...
Agency-levelproject
Federalproject
Federalproject
GХ
Federal project code
Keyactivity
Agency-levelproject
GХХХХ
Spending area code

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Conditions for effective implementation of programming-for-results principles
I. Creating a unified information system that consolidates information on the progress
in implementing government programs and national (federal) projects and enables
citizens to access such information online.
II. Ensuring that expected outcomes from government programs and national (federal)
projects are directly linked to the amounts of budgetary allocations at the budget
classification level.
III. Ensuring complete traceability of financial flows and the course of implementing
individual activities.
IV. Intensively involving Russian Federation regions in implementation of national
(federal) projects and developing program and performance budgeting instruments on
the ground.

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Thank you for listening!