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Pronina Nina Nikolaevna, Ph. D. in Economics, Associate Professor, Plekhanov Russian University of Economics, Russia, Moscow
E-mail: proninann60@gmail.com
Agibalova Elena Leonidovna, Ph. D. in Philology, Associate Professor, Plekhanov Russian University of Economics E-mail: elenagib@rambler.ru
Analysis of the existing model of normative per capita funding
Abstract: the article is dedicated to the improvement of funding for higher educational institutions in the Russian Federation. It reviews main factors that will influence the amount of funding for higher educational institutions next year.
Keywords: financial reform in the sphere of higher education, normative per capita funding, quality of education, human resources, standard costs, government task.
Ensuring the constitutional right to education is one of the most important duties of state policy. The solution of this problem envisages, among other things, the creation of proper mechanisms of educational institutions funding that guarantees the fulfillment of their mission. The indicated provision has been translated into law. Article 4 of the Federal law “On education in the Russian Federation” stipulates that the objective of legal regulation in the educational sphere is “the creation of legal, economic and financial conditions for proper operation and development of the educational system”
Today educational policy is aimed at the achievement of ambitious and challenging goals. The National program of the Russian Federation entitled “The development of education” for the years 2013-2020 envisages the creation in the long run of an educational system that would meet the changing needs of economics and society, provide high-quality services in accordance with developing needs of citizens.
The program stipulates that the priority is the quality improvement of the results of education from the perspective of both the formation of core competencies necessary for personal development of citizens and the solution of general problems of the country’s modernization in socio-cultural and economic spheres.
In recent years a number of measures aimed at the development of the educational system and the quality improvement of the services it renders have been taken at the national level. A big number of such measures were connected with the improvement of funding mechanisms. The documents of the State program “The development of education” indicate
that over the last five years the level ofbudgetary expenditures per one student grew on the average by almost 13.5 % a year, being ahead of the inflation rate. The fastest growth rate was observed in the volumes of budgetary funding for higher education — 20.1 % a year (except 2015).
The development of effective financial and economic mechanisms is among the objectives of the national policy in the sphere of education that have been determined for the next few years. Aggregate costs for the educational sphere in relation to GDP are to increase before 2020 by more than one percentage point — from 5.4 % to 6.5 %. At the same time emphasis should be made on the development of certain financial tools. The National program highlights the importance of the following tools: funding for institutions on the basis of standards that take into account productivity of educational activity as well as the effective contract with teachers. Official documents stress the necessity of a differentiated approach to the funding for government tasks of educational institutions.
The national policy also focuses on the formation of “growth areas” by supporting leading universities designed to become accelerators of modernization of the educational system in general. The national program “The development of education” stipulates that before 2020 at least five Russian universities have to be among one hundred best world universities according to internationally recognized rankings.
The key role in the solution of the abovementioned problems is given to the Ministry of Science and Education of the Russian Federation which exercises powers and functions of the institutor in terms of educational institutions under its
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jurisdiction (par. 5.5.2. Charter of the Ministry approved by the RF Governmental Decree from May 15, 2010 № 337). The Ministry of Science and Education is also responsible for the statutorization of the most important parameters that influence the volume of funding for certain educational institutions. Par. 5.5.10. of the Charter charges the Ministry with the function of determining admission quotas for the institutions of professional education under its jurisdiction in terms of citizens studying on a budgetary basis.
However, the sphere of professional education is still secluded; its quality standards are still far from the demands put forward by economic agents. Insufficient attention is paid to employers’ needs of qualified staff in the educational process.
Another internal controversy is the attempt to solve two tasks simultaneously — to improve the quality of higher education and to make it more accessible. The National program mentions that a big number of school leavers with basic knowledge that is insufficient for them to master higher education become students.
Russian official documents pay attention to the problem of the development of human resources of higher schools. There are difficulties with both initial involvement of young experts into the system of higher education and the creation of incentives for long-term professional activity of teachers.
Many of the abovementioned problems are closely connected with funding for higher education. Despite the growth of absolute volumes of funding today, the level of expenses for education per one student in relation to GDP per capita in Russia is still lower than in most OECD countries. The allocated funds are distributed throughout the country very unevenly; mechanisms of their allocation and utilization are not transparent enough.
Financial restructuring of higher educational sphere in Russia is taking place amid general renovation of the national financial system. For this purpose the Budget Code of the Russian Federation has been considerably amended in recent years, a number of important regulatory documents have been approved. The essence of educational financial restructuring is optimization and improvement of the effectiveness of state expenses for higher education by launching market mechanisms: enhancement of financial and economic independence of universities, the promotion of competition between them.
The shift to normative per capita funding for universities is the major innovation and the core of the financial reform in the system of higher professional education. As the volume of universities’ funding is directly correlated to admission quotas according to government task of training experts in certain areas of expertise or qualifications, standards of per capita funding, the government mastered a very strong financial mechanism of direct influence on the quantity and structure of student groups at universities in terms of areas of expertise and qualifications. The existing disproportions in the training of staff in different areas can be, in fact, eliminated.
The relevance of this problem is based on two groups of factors. First of all, the implementation of the second stage of
the financial reform of national institutions of professional education which envisages the financial support of government task fulfillment calculated on the basis of single (group) standard costs in terms of areas of expertise (qualifications).
Secondly, the implementation of Federal laws № 83-FZ and № 273-FZ, President orders from May 2012, corresponding governmental decrees and following orders of the Russian Ministry of Science and Education which, on the one hand, contribute to the enhancement of financial and economic independence of federal budgetary and autonomous institutions. On the other hand, they demand the evaluation of financial consequences of delegating of authority. The Russian Ministry of Science and Education as the institutor and main administrator of budgetary funds allocated to universities for the implementation of the government tasks is interested in identification and systematization of financial risks including those which may appear in the course or as a result of the shift of universities to normative per capita funding.
The new system of financial support of national (municipal) institutions is based on the mechanism of subsidies on the implementation of the government task for rendering of state services (execution of work). The volumes of the subsidy on the implementation of the government task are related to the volumes of the services rendered by the state. A fundamental distinctive feature of the new mechanism of national institutions funding is the normative approach to the calculation of costs for the rendering of state services. The main tool of the new mechanism of the national institutions funding — normative per capita funding, are standard costs for the fulfillment of the government task.
We can conventionally distinguish between two main stages in the development of legal and methodological base of normative per capita funding:
• composition of basic documents in order to switch to normative funding of state institutions using individual standard costs;
• composition of documents for the switch of higher professional education institutions to single collective standard costs.
The first stage is characterized by the start of the reformation of all the state institutions and the switch to normative funding. At this stage in 2010 the Russian Government, the Ministry of Finance and the Ministry of Economic Development prepared federal normative legal and methodological base to switch from estimated funding to normative funding which became the basis on which federal authorities that perform the functions and powers of universities’ institutors (herein after referred to as “federal institutors”) formed departmental normative legal base.
Questions concerning the formulation of the government task, its format, volume and the level of data detalization, type of reporting and control as well as other questions at the federal level are regulated by the Decree of the Government of the Russian Federation from September 2, 2010 № 671 “On the procedure for the formation of the government task regarding
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federal state institutions and financial support of the government task implementation”.
It stipulates that the financial support of the government task implementation by state budgetary institutions is performed through subsidies on the reimbursement of standard costs connected with rendering of state services (execution of work) to individuals and (or) legal entities from federal budget resources within the limits of budget allocations designated for the indicated purposes.
The amount of the subsidy has to be calculated on the basis of standard costs for rendering of state services and standard costs for the maintenance of the corresponding real estate property and movable valuables assigned to state budgetary (autonomous) institution or acquired by the state (autonomous) institution from the funds allocated to it by the institutor for the acquisition of such property (except for the leased property), costs for tax payments as an object of taxation which recognizes the corresponding property including land property.
The questions concerning standard costs are outlined in more detail in Guidelines on the calculation of standard costs for the rendering of state services by federal state institutions and standard costs for the maintenance of property of federal state institutions confirmed by the joint order of the Ministry of Finance of the Russian Federation and the Ministry of Economic Development of the Russian Federation № 137n/527 from October 29, 2010.
Part of federal institutors accepted the procedures for the determination of standard costs common for all the state institutions under their jurisdiction. Others, for example, the Russian Ministry of Education and Science, the Russian Ministry of Finance, the Russian Ministry of Emergency Situations, the Russian Ministry of Justice, the Russian Ministry of Agriculture, the Russian Federal Fisheries Agency, Rospechat, the Federal Rail Transport Agency accepted the procedures for the determination of standard costs for state institutions of higher professional education under their jurisdiction separately.
In 2011 the Ministry approved the procedures for the determination of individual standard costs (order of the Russian Ministry of Education and Science from June 27, 2011 № 2070 “On the approval of the procedure for determining standard costs for the rendering of state services and standard costs for the maintenance of the property of federal state institutions of professional education whereas functions and powers of the institutor are performed by the Ministry of Education and Science of the Russian Federation”).
The procedure sets the rules for determining standard costs for the rendering of state services and standard costs for the maintenance of the property of federal state institutions of professional education whereas functions and powers of the institutor are performed by the Ministry of Education and Science of the Russian Federation and for which the Ministry approved subsidies from the federal budget according to provision 1 article 78.1 of the Budget Code of the Russian Federation.
Guidelines on determining standard costs indicated in the abovementioned Procedures use the following methods:
• normative method: standard costs were determined by multiplying the unit value of cost group by the number of units in the cost group;
• method of “initial” basic standard costs: standard costs for the ensuing fiscal year were determined on the basis of the initial standard costs calculated by a structural method on the basis of data for the accounting, current or ensuing fiscal year.
As almost all the institutions of higher professional education provide several state services, costs that are reflected in the institute’s budget estimates according to the corresponding KOSGU articles (Classification of operations of government control sector) are distributed among these state services proportionally to the fixed base of allocation.
Different indicators including the volume of state service, the number of teaching staff, and the payroll budget for the teaching staff are used as a basis for allocation depending on the function of costs.
Initial standards are determined by dividing standard costs which are the result of distribution among services by the volume of the state service provided (number of students) in the corresponding year.
Initial standard costs calculated in such a way are adjusted to the ensuing fiscal year considering indexation according to coefficients determined by the Russian Ministry of Finance for the ensuing fiscal year.
Standard costs for rendering of state services for the ensuing fiscal year are determined by multiplying adjusted standard costs for rendering of one unit of state service by the volume of the state service predetermined for the ensuing fiscal year.
At the same time when calculating standard costs, costs for the fulfillment of public obligations which, according to the recommendations from the Russian Ministry of Finance have to be directed to the institution as part of subsidies on other purposes, are not taken into account.
General standard costs for state services are calculated by summing up standard costs determined by the normative method and standard costs determined by the method of initial standards.
Standards costs for the maintenance of property are calculated separately and contain:
• part of the costs for the payment for utility services;
• costs for the payment of taxes as taxable items which recognize real estate property and movable valuables assigned to the institution or acquired by the institution from the funds allocated to it by the institutor for the acquisition of such property including land property.
In 2011 standards were specificated in terms of state educational services and, according to the abovementioned procedures, subsidies on the implementation of the government task for universities for the year 2012 were calculated. The Order from the Russian Ministry of Education and Science № 2070
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indicates that its validity period is limited by the “transition period” which is followed by the switch to group standard costs.
Since 2011 the Russian Ministry of Education and Science has started drafting guidelines on the switch to single group standard costs according to areas of expertise (qualifications) and the procedure for their determination — this period can be considered the beginning of the second stage of the development of normative legal and methodological base of switch to normative per capita funding of universities.
This procedure had to take into account not only the necessity of the switch to group standard costs but also new priorities of state policy in the sphere of professional education. The objective conditions for the performance of the switch to single group standard costs according to areas of expertise (qualifications) were the following political decisions of the Russian President, the Russian government, the adopted laws and regulations.
The abovementioned documents established a number of new approaches to the calculation of standard costs in state institutions. A new cost grouping was introduced — according to the level of their participation in rendering of services. Costs for rendering of a state service were subdivided into two groups: costs directly connected with rendering of services and costs for general duties. According to the Guidelines, standard costs can be determined separately for every federal budgetary or autonomous institution, in average for the group of such institutions or for the group of institutions with the use of adjusting coefficients that take into account the peculiarities of a federal budgetary institution.
Three possible methods of determining standard costs have been specified: normative, structural, expert. Normative method implies a direct calculation of every costs component on the basis of objective requirements to the quality and conditions of rendering a service. Structural method presupposes the determination of separate costs components proportionally to the selected basis (labour costs, utilized area, the volume of services rendered). Expert method implies the use of expert evaluations of determining cost components. When using any normalization method or when combining them, the main limitation is the total volume of federal budget allocations for funding for the government task implementation for the corresponding year.
The Guidelines indicate that the procedure for the determination of standard costs and their distribution according to separate state services should be specified by federal authorities that execute functions and powers of the institutor of federal state institutions.
In this regard all the institutors of federal state institutions of higher professional education in the fixed transition period from January 1, 2011 to January 1, 2012 prepared a branch-wise normative legal and methodological base for determining standard costs for the rendering of state services (execution of work) by federal state institutions.
Today the process of switch of higher educational institutions to normative per capita funding is terminating.
From September 1, 2015 all bachelor students who study on a budgetary basis are being funded according to the normative per capita funding established annually by the Order of the Ministry of Education and Science. Today the orders by the Russian Ministry of Education and Science № 420 from 29.04.2014 and the refining order № 1553 from 08.12.2014 constitute the existing normative base for the determination of the volume of higher educational institutions funding. The volume of funding of senior students with a specialist degree within the volume of general funding for universities is calculated according to budgetary estimates.
The order of the Russian Ministry of Education and Science № 1553 from 08.12.2014 stipulates multiplying coefficients for the calculation of utility payments and transport costs for sending academic staff to professional trainings and students to internships.
A very important document, to our mind, is the Order of the Russian Ministry of Education and Science № Р-225 from December 17, 2014 “On the approval of methodology for a gradual switch from the existing ratio of the number of teachers and students fixed by the normative legal acts for separate higher educational institutions to the ratio of the number of teachers and students in higher educational institutions determined according to certain qualifications and areas of expertise”.
This order not only improves the determination of professors and students ratios but also sets the mechanism of dependence of the educational services quality and the volume of funding for a higher educational institution.
Together with the announcement of the call for admission quotas the Russian Ministry of Education and Science has to determine adjusting coefficients fixed for universities considering the volume of budget allocations designed by the federal budget for the indicated purposes. These coefficients are:
• adjusting coefficient that reflects the right of the educational institution to elaborate and approve on its own educational standards for the implementation of professional educational programs of higher education;
• adjusting coefficients that reflect the assessment of the quality of implementation of professional educational programs of higher education for the following fiscal year and take into consideration:
a) quality of admission to higher educational programs;
b) scientific potential of the educational institution;
c) coefficient of budgetary limitations applicable to the volume of standard costs for rendering of state services, separate components of standard costs for rendering of state services and/or adjusting coefficients in order to bring the volume of standard costs for rendering of state services into conformity with volumes of budget allocations envisaged by the federal law on the federal budget for the ensuing fiscal year and the target period for these purposes.
d) adjusting coefficients of the quality of the admission to programs of higher education are determined bases on:
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• average grade of the Unified State Exam for the qualification and area of expertise (hereinafter referred to as “the USE”) and the results of artistic tests for bachelor and specialist programs in terms of enlarged groups of qualifications and areas of expertise and are applied to basic standard costs for the implementation of educational programs on corresponding qualifications and areas of expertise;
• ratio of students, winners and awardees of school academic competitions enrolled at bachelor and specialist programs, to the total number of students enrolled at bachelor and specialist programs.
The USE average grade for a specialist program or for the area of expertise and the results of artistic tests are calculated according to the methodology for competitive selection and decision-making criteria for admission quotas to specialist programs and qualifications of higher education programs that have state accreditation at the expense of federal budget allocations approved by the Order of the Russian Ministry of Education and Science on July 15, 2013 N 560.
The ratio of students, winners and awardees of school academic contests enrolled at bachelor and specialist programs to the total number of students enrolled at bachelor and specialist programs is calculated by summing up “the number of students, winners and awardees of the final stage of the Russian school academic contest, members of Russian national teams participating in international academic contests on general subjects and admitted to the first year of full-time bachelor and specialist programs without admission tests” and “the number of students, winners and awardees of school academic contests admitted to the first year of full-time bachelor and specialist programs in qualifications and (or) areas of expertise corresponding to the profile of the academic contest without admission tests” of the annual monitoring of the effectiveness of higher educational institutions (over the period that precedes the year when the adjusting coefficients are calculated) and the division of this sum by the total number of student admitted to the first year of full-time bachelor and specialist programs.
e) adjusting coefficients that take into account the scientific potential of the educational institution are determined based on:
• volume of revenue from scientific research per 1 academic employee;
• publishing activity of academic personnel in the educational institution.
f) adjusting coefficient that reflects the volume of revenue from scientific research per one academic employee, is determined based on the revenue from R&D excluding those received from federal budgetary funds in the form of subsidies on the fulfillment of the government task for work in the scientific sphere, not on a competitive basis, per one academic employee including dual jobholders and
excluding employees working with a civil contract for a year preceding the date of determining adjusting coefficients.
g) adjusting coefficient that reflects publishing activity of the educational institution, is determined based on the number of publications in editions that are listed on scientific citation indexing websites Web of Science and Scopus per 100 academic employees for a year preceding the date of determining adjusting coefficients.
Threshold values of indicators of objective characteristics of higher educational institutions for the determination of adjusting coefficients that reflect the quality assessment of implementation of professional educational programs of higher education have to be approved by the Russian Ministry of Education and Science not later than one month after the official publication of the federal law on the federal budget for the ensuing fiscal year and target period.
The adjusting coefficient that reflects the assessment of the admission quality is applied in terms of all components of basic standard costs for rendering of state services for the implementation of educational programs according to the levels of education — bachelor and specialist programs.
The adjusting coefficient that reflects the assessment of the scientific potential of the educational institution is applied in terms of all components of basic standard costs for rendering of state services for the implementation of educational programs according to the levels of education — bachelor, specialist, master, postgraduate programs, postgraduate military course, assistantship. For basic standard costs for rendering of state services for the implementation of educational programs in master and postgraduate programs a higher level of this adjusting coefficient is set (at least 1.5 times exceeding the value of the coefficient for basic standard costs for the implementation of educational programs according to the levels of education — bachelor and specialist programs).
The adjusting coefficient that reflects the right of the educational institution to develop and approve on its own educational standards for the implementation of higher educational programs, is applied in terms of all components of basic standard costs for rendering of state services for the implementation of educational programs according to the levels of education — bachelor, specialist, master, postgraduate programs, postgraduate military course, assistantship.
The adjusting coefficient that reflects the exercise by the leading university of the right to develop and approve on its own educational standards for the implementation of higher educational programs, is calculated based on the ratio of the corresponding educational programs that are implemented by the leading university in the year when adjusting coefficients in terms of students enrolled according to these educational standards to the total number of educational programs implemented by the leading university and is applied in terms of all components of basic standard costs for
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rendering of state services for the implementation of educational programs according to the levels of education — bachelor, specialist, master, postgraduate programs, postgraduate military course, assistantship.
The adjusting coefficient that reflects the peculiarities of the implementation of educational programs in educational institutions secured in legislation that are unique scientific and educational complexes, is applied in terms of all components of basic standard costs for rendering of state services for the implementation of educational programs according to the levels of education — bachelor, specialist, master, postgraduate programs, postgraduate military course, assistantship in corresponding educational institutions.
h) The coefficient of budgetary limitations applied to the volume of standard costs for rendering of state services, separate components of standard costs for rendering of state services and/or adjusting coefficients in order to bring the volume of standard costs for rendering of state services into conformity with the volume of budgetary allocations designed by the federal law on the federal budget for the ensuing fiscal year and target period for these purposes. Depending on the results of the activity of the educational institution funding allocated to higher educational institutions will be connected with quality and quantity indicators for the preceding fiscal year.
References:
1. Law «On education in the Russian Federation» № 273-FZ from December 29, 2012.
2. Governmental Decree of the Russian Federation № 337 from May 15, 2010. «On the Ministry of Education and Science of the Russian Federation».
3. Order of the Russian Ministry of Education and Science № 560 from July 15, 2013 «On the approval of the Procedures for holding a competition for the distribution of admission quotas according to professions, qualifications and areas of expertise for studying at educational programs of secondary professional and higher educational with state accreditation at the expense of federal budget allocations».
4. Governmental Decree of the Russian Federation № 671 from September 2, 2010 «On the procedures for the formation of the government task regarding federal state institutions and funding for the implementation of the government task».
5. Decree of the Russian Ministry of Education and Science № 2070 from June 27, 2011 «On the approval of the procedure for determining standard costs for the rendering of state services and standard costs for the maintenance of the property of federal state institutions of professional education whereas functions and powers of the institutor are performed by the Ministry of Education and Science of the Russian Federation».
6. Order of the Russian Ministry of Education and Science № Р-225 from December 17, 2014 «On the approval of methodology for a gradual switch from the existing ratio of the number of teachers and students fixed by the normative legal acts for separate higher educational institutions to the ratio of the number of teachers and students in higher educational institutions determined according to certain fields of expertise and qualifications».
7. Order of the Russian Ministry of Education and Science № 420 from 29.04.2014. «On the list and composition of costs groups of qualifications and areas of expertise in state services for the implementation of main professional programs of higher education — bachelor, specialist, master programs, training of academic staff in postgraduate programs (postgraduate military course), medical residency and assistantship, final values and size of basic standard costs components for state services according to cost groups of qualifications and areas of expertise, adjusting coefficients, according to modes of study (intra-extramural, extramural), forms of implementation of educational programs (network), educational technology used (distant learning technology, e-learning) in terms of students enrolled to the first year in 2015 for the whole period of study».
8. Order of the Russian Ministry of Education and Science № 1553 from 08.12.2014 «On introducing amendments to the Order of the Russian Ministry of Education and Science from April 29, 2014 N 420 “On the list and composition of costs groups of qualifications and areas of expertise in state services for the implementation of main professional programs of higher education — bachelor, specialist, master programs, training of academic staff in postgraduate programs (postgraduate military course), medical residency and assistantship, final values and size of basic standard costs components for state services according to cost groups of qualifications and areas of training, adjusting coefficients, according to modes of study (intra-extramural, extramural), forms of implementation of educational programs (network), educational technology used (distant learning technology, e-learning) in terms of students enrolled to the first year in 2015 for the whole period of study”».
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