Ijmet 10 01_128

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International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 01, January 2019, pp. 1263-1271, Article ID: IJMET_10_01_128
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=01
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© IAEME Publication Scopus Indexed
PROCESS APPROACH TO IMPROVING
REVENUES AND EXPENDITURES
MANAGEMENT SYSTEM OF THE MINISTRY OF
EDUCATION AND SCIENCE OF RUSSIA
Tatiana Viktorovna Krupa
GlobalLab, Ltd, Moscow, Russian Federation
ABSTRACT
According to the results of the Russian Finance Ministry assessment of the quality of
financial management of the managers of the federal budget, including process and
outcome indicators of financial activity as part of the state programs « Education
Development », « Science and Technology Development», the Ministry of Education and
Science of the Russian Federation in 2017 occupied the 26th place.
The relatively low financial and managerial statements of the Ministry of Education
and Science of the Russian Federation activity concerning government program funding
are caused by deficiencies in methods and tools for managing budget expenditures, and
it is proved by Russian Audit Chamber’s findings concerning the ineffectiveness of
financial expenditures in the «5-100» project.
In this way the relevance of the research theme is due to need for theoretical
development of the conceptual construct, modifying the model of organizational and
financial clearing for subsidizing government programs, adapting the algorithm for
applying social bonds to the education and science sectors of the Russian Federation,
justifying new methodological approaches and practical recommendations for developing
the system for financing government programs in the domain of education and science.
Keywords: Management, Process approach, higher educational establishment, Structure,
Assistance, Ministry of education and science of Russia, Development.
Cite this Article: Tatiana Viktorovna Krupa, Process Approach to Improving Revenues
and Expenditures Management System of the Ministry of Education and Science of Russia,
International Journal of Mechanical Engineering and Technology, 10(01), 2019, pp.1263–
1271
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&Type=01
1. INTRODUCTION
Expenditures and revenues of the state-financed sector and public authorities in the structure of
a federalism based on the principles of state integrity, equality and national self-determination,
unity of the state power system, supremacy of federal law, delimitation of subjects of introduction

between the federation and its subjects, equal rights of subjects, constitute, as it is known,
interrelated budgets of three levels of hierarchy:
1.1. Interrelated budgets of three levels of hierarchy
1. federal authorities
2. the authorities of the Federation subjects
3. local governments
1.2. Interpretations of the concept of "budget"
In the scientific literature there are various interpretations of the concept of "budget" as: economic
relations regarding the formation, distribution and use of budgetary funds;
• regulatory act establishing the norms of formation and disposal of public resources;
• organizational relations according to the approved list of income and expenses of the
organization (enterprise);
• material base controlled by the structural unit for a specific use, etc.
2. LITERATURE REVIEW
2.1. Approaches to the perception of “budget” concept
Approaches to the perception of “budget” concept in different authors’ studies vary.
2.1.1. Khrutskiy
So, Khrutskiy considered, that budget means “financial goals expression” and “planned financial
estimates and disbursement schedules” at the same time.
2.1.2. Shvetsov and Bulash
To the opinion of Shvetsov and Bulash the concept of budget must be considered as public
domain in-use for the good of the country.
2.1.3. Brimson and Antone
By contrast Brimson and Antone considered this concept as “quantification of entrepreneur
targets during certain period” [1].
2.1.4. Ways to regard a complex phenomenon of budget
The point is, such complex phenomenon of budget can be regarded and interpreted in different
ways [2]:
1. independent economic system (the system of cash nexus which provides the
formation, distribution and using of Monetary Funds),
2. financial and material base (state Monetary Fund for performing its tasks and
functions);
3. the document, which has legal power, legal act, which approves the main state
financial plan for the certain period of time (the budget plan of cash flows)
4. as operative plan of costs distribution (approved appropriation directions of a
government department) [3].
5. According to the Russian Budget Code, the “budget is a form of Monetary Fund
formation and expenditure, destined for financial supplying state tasks and functions
and local self-administration”.

Process Approach to Improving Revenues and Expenditures Management System of the Ministry of
Education and Science of Russia
During analysis and synthesis the definition of state budget imposed by domestic and foreign
authors, we decide, that budget as basic part of financial system, reflects all the economic
processes concerning the implementation of political decisions as a part of state financial plan
(estimates of income and expenditure from the perspective of state program) with certain source
of creation and monitoring of using the State Monetary Fund and has leading role in socio-
economic development of the country [4].
2.2. Functions of state budget:
1. concerning distribution (forming and using of centralized financial resources),
2. redistribution (national income and Gross Domestic Product),
3. control (overview of the timeliness and incoming financial resources flows in the
disposal of government authorities etc.) [3].
2.3. Ways of budget implementation in the international practice
There are different ways of budget implementation in the international practice [5]:
• Treasury pattern (the responsibility for the organization of performing budgets and
management of budgetary funds is confined to authorities of the financial system,
which perform functions of administrators’ cashiers and receivers of budgetary funds
and pay on their behalf.
• Bank pattern (the organization and performing of budget is confined to the Central
Bank, and in certain cases – to commercial banks).
• Mixed pattern (allows providing financial operations with budgetary accounts by
Treasury and the Central Bank).
The relevance of this topic on the modern stage of financial science development doesn’t fade
because of constant improving of budgetary processes.
3. MATERIALS AND METHODS
In the science literature the variety of research findings concerning funding the separate areas of
education and science are submitted. The methods and approaches of financial accompanying for
researches and favors are regarded independently from the general educational system. Funding
issues of educational and scientific sphere are not well studied and need the improving of
category-based system register of funding state programs in the Russian educational and science
field, the improving of technical and financial accompanying of subsidization these programs
pattern, the investigation an algorithm for the application supportive bonds in the educational and
science field, new methodological approaches to the impact assessment of using state programs
funding tools, development of practical guidance concerning the management of cash flows of
these programs [6].
It has been proposed, that by applying developed methodological approach to the assessment
of government programs financial security effectiveness’ sources and budget allocation
mechanisms while project management with the elements of “process approach”, to allow to
create perfect conditions for ensuring the effectiveness of Russian Ministry of Education and
Science and to be able to identify priorities for its development. In this context, optimal system
character means effectiveness, because of “characterizing system requirements satisfaction and
compliance with planning targets, which provide the best usage of system capacities”, namely
the destination of specified parameters with the budgetary savings is the goal [7].
For assessing the management of the state programs financing system in the field of education
and science the Goldratt’s methodology for efficiency was also used with the aim of identification
of priority areas in the state programs developing in the field of science and education, evaluating

the results of these programs funding usage with the help of developed methodological approach
to the usage of financial resources and improving the whole state projects funding system in the
science and education field [8].
4. RESULT AND DISCUSSIONS
4.1. The theory of constraints
The Goldratt’s theory of constraints provides the systemic arrangement for the effective project
and successive removal of contractions between the main assessment indicators – deadlines,
quality, value, expenditures, required productivity and available resources via the logical solution
[9].
The theory of constraints is the process of constant improving, namely the management
approaches, which form the sequence of operations of effectiveness and system balancing, which
includes:
• searching of system restrictions of state programs funding in the science and education
field.
• solution of tasks concerning the effectiveness of usage of state programs funding
restriction in the science and education field.
• agreement of the rest of actions in the coincidence with adopted solution.
• increasing of carrying capacity of restrictions.
• choice under the condition of previous completion of missed links.
If the weak links are reviled during the financial monitoring, a non-effective process, which
restricts its durability among “P” links (nonrestrictive ones) according to the Goldratt’s theory, it
is necessary to identify and eliminate them. Non-effective process is called the restrictiveness.
4.2. The two-pronged approach
For achieving the goals of non-commercials, the effectiveness of budgetary processes via the
improving revenues and expenditures management system it is necessary to apply the two-
pronged approach, which consists the monitoring of operating costs and monetary value, but the
productivity of business system cash flows is not measured. During this process the investments
are divided into active and passive [10].
4.2.1. The passive investments
The passive investments, influenced by active investments, are not measured in monetary value,
because during the workflow the ensuring of availability of qualified education for all sectors of
the community occurs.
4.2.2. Active investments
Active investments, influencing the passive investments include accommodations, tools and
material assets. It means the expenditures on central office of authority under the operational
expenses.
4.3. Tasks for the project managers in the government authorities
The building of interrelation of the main indicators of the constraints theory concerning the
Russian Ministry of Education and Science activities, through which in our case the population
passes via the non-monetary system part and receives educational services, increases the
“productivity” of Russian Ministry of Education and Science due to the changes and the

increasing demands for the provided services. In connection with that, the main task for the
project managers in the government authorities are:
• the increasing of productivity via the non-monetary flows;
• performing their duties;
• decreasing the levels of investment, budgetary expenditures;
• reducing the transaction costs;
• the use of versatile control;
• to monitor all procedures (performed not only at the implementation stage, but
throughout the entire life cycle of the implementation of state programs). It will reduce
the risk of failing to achieve the maximum level of performance of end indicators and
improving the efficiency of structural units of the Ministry of Education and Science
of Russia.
Successful implementation of project management in the system of financing state programs
in the field of education and science depends on:
• the timeliness of identifying the causes of adverse events affecting its non-cash flow
performance;
• eradicating the causes of adverse events affecting its non-cash flow performance
without increasing the level of active investments and operating expenses;
• annual operating budget (it is secondary here, since it is a means of a necessary
condition, but not a goal;
• reduction in active investments i.e. and operating expenses will make a positive
impact on it.
In this regard, it is possible to observe continuous improvement of existing processes that
contribute both to the development of mechanisms for allocation of budgetary funds during
implementation of state programs, and in general, management of the financing system of state
programs in the Russian Federation.
4.3.1. Responsibility for implementation of state programs
The responsibility for implementation of state programs is imposed on all project participants —
these are representatives of various structural units of the Ministry of Education and Science of
Russia. Thus, the responsibility for the final result increases not only in implementation of a
certain project, but also in obtaining a positive result for the department as a whole.
4.3.2. Main problems:
• The lack of flexibility and dynamism in the current system for assessing the
effectiveness of financial support for state programs in the field of education and
science of the Russian Federation [11].
• When conducting internal financial management, the department does not take into
account the integrated indicator of financial, managerial and indicative parameters for
implementation of state programs.
• First, the need to improve the budget allocation mechanism is due to the fact that for
the prospective development of the economy, it is necessary to raise the status of the
public administration system and control over the effectiveness of the budget funds
use.
• In order to analyze current activities and the future outlook (introducing a financial
instrument using social bonds), it is necessary to take into account that investments

have a long-term character, and project management is an effective way of
implementing long-term projects, which allows you to optimally distribute increased
risks among numerous project participants.
It can be concluded that, knowing the root cause, it is possible:
• to accurately identify the causes in conjunction with the resources and peculiarities of
interaction with the environment,
• to determine the priorities that need some resource support,
• to build a consistent action plan on eliminating the causes of the inefficient operation
of the financial system of financing these government programs, with the help of the
future reality tree.
All these actions will allow to adapt the system of their financing, including the processes of
budget allocation to changes and requirements of the external environment, which ultimately
should lead to the planned results of the activities of the Ministry of Education and Science of
Russia.
4.4. The process approach privileges
A process approach is the elemental core of ISO’s view of a QMS. When your organization is
using a process approach it means that the organization manages and controls the processes that
make up their organization, the interactions between the processes and the inputs and the outputs
that string these processes together.
The activities of Russian Ministry of Science and Education are carried via state programs
funding in the field of science and education, based on budget allocation mechanism, the
statement of work of which constantly focuses to legislation and regulations of budgetary
relations (taking into account the fact of its constant changing).
That means, that the process of state programs financial system developing in the science and
education field has an adaptive type and implies its adaptation to the real operating conditions,
also designed to perform the monitoring activities for designing, execution and analysis of
budgetary expenditures with further consolidation of data for making up the prediction of further
developing and its compatibility with the goals implementation [12].
In that regard, we need to improve the current mechanism of budgetary allocations, belonging
to state programs funding in the science and education field via the constant accommodation of
system parameters to the changing circumstances of environment [13].
The procurement activity in the Ministry of Education and Science of the Russian Federation
is carried out through an interconnected set of systemically repetitive actions, which corresponds
to the process approach of managing by a federal body.
Implementation of state programs in project management with elements of the process
approach, accompanied by an assessment of the effectiveness of their financial support, is quite
relevant, it allows you to identify the main elements, the links between them, properties,
subsystems, and directions for development of the system of financing state programs in the field
of education and science of the Russian Federation
The control functions of the Ministry of Education and Science of Russia under project
management with elements of the process approach will provide:
• improving the efficiency of the state structure;
• strengthening of financial control measures for the resource support of state programs
implementation in the Ministry of Education and Science of Russia;
• improving the efficiency of budget expenditures;

• minimizing the risks of loss of time, resources and deadlines during implementation
of the state programs of the Russian Federation;
• positive impact on implementation of the strategic planning of the Ministry;
• identification of promising areas of development of the financing system of state
programs of the Russian Federation.
Taking into account the fact that RVC is an inter-program project of a diversified target
orientation, it was proposed, in codes of budget classification, to assign a separate type of
expenditures reflecting the execution of priority projects, including activities of RVC and projects
included in STI (scientific and technical information) with the aim of conducting a more in-depth
analysis of the effectiveness of budget expenditures [14].
Confirmation of the existing contradiction and proof of the correctness of the proposal is the
position of Melnikova E. V. and Tsvetkova V. A. [15], which states that the Russian STI system
need to be the unique and must be coordinated from the only center, it will help avoid department
dissociation, will help overcome duplication in the work of various elements of the NTI system,
reduce working hours, optimize the use of financial resources in the STI sphere and ensure the
sustainable development of Russian economy and society.
From this perspective, we consider it necessary to single out a single type of accounting
expenses in accordance with the principles of assigning budget classification codes for a set of
different types of expenses to develop promising industries in Russia for separate accounting
using the separate type of expenses in the budget classification code ensuring the costs of legal
entities for implementation of STI.
It is important to note that in 2016 the Ministry of Finance of Russia developed a comparative
table on changes in the grouping of types of expenses for budgets of the budget system of the
Russian Federation for 2017 [16]. However, no changes regarding the allocation of costs in terms
of implementation of STI into a separate type have been identified [17, 18].
5. CONCLUSION
Considering the above, we can draw the following conclusion that the existing problems impede
the collection of data on the objects of analytical accounting of scientific and technological
information, and therefore cannot fully comply with the principles of the budget system,
including meeting the need for transparency of the structure of budget expenditures when
allocating provisions, stipulated by the law (decision) on the budget, by the main managers of
budgetary funds, sections, subsections, target items, groups (groups and subgroups) of the types
of expenditures of budgets and targeting the targeted nature of the budget.
It is revealed:
• The presented control and analytical measures contribute to the aggregation of
financial resources by the objects of analytical accounting within the framework of
STI, to the increase the transparency of the budget expenditure structure in allocation
of budgetary provisions.
• As a whole, implementation of all the above proposals contributes to improving the
functioning of the system of financing state programs in the field of education and
science of the Russian Federation by increasing the level of forecasting, organization,
regulation, coordination, incentives and control.
• the proposals on financial and informational interaction with the environment will
allow the system of financing state programs in the field of education and science of
the Russian Federation to meet the modern needs of the information society.

• The establishment of a single budget classification code for NTI objects will allow to
conduct analytical accounting in accordance with the principle of unity of the budget
system.
• Implementation of practical recommendations (definition of the formula for
calculating the total amount of unfulfilled obligations) and the proposal to form a
register of unfulfilled obligations contribute to improving the quality of federal budget
execution and improving the management of state program finances.
• The study of the effectiveness of the financing state works (services) system made it
possible to substantiate proposals for creating an information base for ensuring
transparency, openness and accountability of budget financing, and repayment of
outstanding financial obligations.
• According to the results of the work, a formula for calculating the total amount of
outstanding responsibilities is presented (taking into account the accrued and written
off amounts of debt).
• It was proposed to form a register of unfulfilled responsibilities, based on the data of
the calculations made.
• The proposals for improving the management of cash flows in the system of financing
state programs in the field of education and science of the Russian Federation allow
it to comply with the principles of the budget system of the Russian Federation:
transparency and reliability, full reflection of income and expenses.
FUNDING STATEMENT
Applied research described in this paper is carried out with financial support of the state
represented by the Russian Federation Ministry for Education and Science under the Agreement
#14.576.21.0100 of 26 September 2017 (unique identifier of applied research -
RFMEFI57617X0100).
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