Illegal and inappropriate use of budget funds. Review of arbitration practice

03.04.2019

By virtue of Art. 306.4 of the Budget Code of the Russian Federation, misuse of budget funds is recognized as the direction of budget funds of the budget system of the Russian Federation and the payment of monetary obligations for purposes that do not fully or partially correspond to the goals determined by the law (decision) on the budget, the consolidated budget list, the budget list, the budget estimate, the contract (agreement) or another document that is the legal basis for the provision of these funds. According to the Ministry of Finance, expressed in Letter No. 02-09-08/24851 dated April 25, 2017, unlawful expenditure of budget funds should include actions (inactions) that contradict the requirements of generally binding state regulations of a permanent or temporary nature, designed for repeated use, regulating budgetary legal relations . In this publication, we will consider several court decisions related to disputes regarding the classification of identified violations as misuse and misuse of funds.

Misuse of budget funds when organizing events

Subject of dispute. The Resolution of the AS VSO dated January 23, 2019 No. A74-2693/2018 considered the dispute between the Khakass Customs (hereinafter referred to as the institution) and the Federal Treasury Department for the Republic of Khakassia (hereinafter referred to as the control body). During the inspection, the control body found that the institution violated Art. 70 of the Budget Code of the Russian Federation, expressed in the unlawful expenditure of federal budget funds to pay for services for organizing and holding ceremonial events (celebration of Customs Officer’s Day) in the amount of 35,000 rubles. Disagreeing with the conclusions of the control body, the institution went to court.

The court's position. Considering the controversial situation, the court proceeded from the following.

In accordance with Art. 70 of the Budget Code of the Russian Federation, ensuring the fulfillment of the functions of government institutions includes remuneration of employees of government institutions, monetary support (monetary remuneration, monetary allowance, wages) of employees of government bodies (state bodies), local governments, persons holding government positions in the Russian Federation, government positions of constituent entities Russian Federation and municipal positions, state and municipal employees, other categories of employees, travel and other payments in accordance with employment contracts (service contracts, contracts) and the legislation of the Russian Federation, the legislation of the constituent entities of the Russian Federation and municipal legal acts; procurement of goods, works, services to meet state (municipal) needs; payment of taxes, fees and other obligatory payments to the budget system of the Russian Federation; compensation for damage caused by a government institution in the course of its activities.

The concept of “illegal expenditure of budget funds” is not defined by the Budget Code. Consequently, when classifying actions (inaction) of participants in the budget process as unlawful expenditure of budget funds, one should proceed from the generally accepted practice in legal practice of recognizing actions (inaction) as unlawful if they contradict the requirements of legal norms.

According to the Resolution of the State Duma of the Russian Federation dated November 11, 1996 No. 781-II GD “On appeal to the Constitutional Court of the Russian Federation,” a legal norm is usually understood as a generally binding state order of a permanent or temporary nature, designed for repeated use. The position of the Ministry of Finance on this issue is expressed in Letter dated April 25, 2017 No. 02-09-08/24851.

From these norms we can conclude that illegal spending means spending budget funds in violation of current legislation, that is, the term “wrongful spending” is synonymous with the term “illegal use of funds.” These violations include, in particular:

– making advance payments in excess of the established amount; – use of budget funds without confirmation by supporting documents; – overpayments and improper payments of wages (salary, allowance); – excess expenses (except for overpayments and improper payments of wages (salary, allowance); – other violations.

In accordance with the Instructions on the procedure for applying the budget classification of the Russian Federation, approved by Order of the Ministry of Finance of the Russian Federation dated July 1, 2013 No. 65n (as amended in force during the controversial period), expenses under Article 226 “Other expenses, services” of KOSGU and code of the type of expenses of the classification of budget expenses 244 “Other purchases of goods, works and services to meet state (municipal) needs” did not include expenses for holding cultural events and other special events.

At the same time, the approximate list of expenses given in this article indicates the need for their connection with the functions of the institution for which it was created. At the same time, when assessing the nature of the costs incurred for holding events to celebrate Customs Officer's Day, the courts did not see such a connection.

Please note: In this case, the expenditure of federal budget funds on celebrations does not comply with current legislation.

What mitigates responsibility?

A judge, body, or official considering a case when imposing a fine for violation of misuse of budget funds may recognize the following circumstances as mitigating | Art. 4.2 Code of Administrative Offenses of the Russian Federation:

• repentance of the person who committed the administrative offense;
• voluntary cessation of unlawful behavior;
• voluntary reporting of an administrative offense committed;
• providing assistance to the body authorized to carry out proceedings in a case of an administrative offense in establishing the circumstances to be established in a case of an administrative offense;
• preventing harmful consequences of an administrative offense;
• voluntary compensation for damage caused or voluntary elimination of harm caused;
• voluntary execution, before a decision is made in a case of an administrative offense, of an order to eliminate the violation;
• committing an administrative offense in a state of strong emotional excitement (affect) or due to a combination of difficult personal or family circumstances;
• commission of an administrative offense by a minor;
• commission of an administrative offense by a pregnant woman or a woman with a young child;
• A judge, body, or official considering a case of an administrative offense may recognize other circumstances as mitigating.

Payment of canteen workers using subsidies

Subject of dispute. The Resolution of the AS VSO dated February 14, 2019 No. A58-4308/2017 considered the dispute between the State Educational Institution of the Republic of Sakha (Yakutia) “Yakut Industrial College” (hereinafter referred to as the institution) and the Ministry of Finance of the Republic of Sakha (Yakutia) (hereinafter referred to as the control body). During the inspection, the control body found that the staffing table in the institution provided for eight staff positions for canteen workers (production manager, four cooks, two dishwashers, a cleaning lady). According to the control body, the institution misused subsidy funds for government tasks, which was expressed in the direction of these funds:

– for remuneration of canteen workers not related to the provision of public services and performing functions not related to the main activities of the institution; – to compensate for the cost of travel and baggage transportation to and from the place of vacation use for canteen workers not related to the provision of public services and engaged in activities not related to the main activities of the institution; – for bonuses for canteen workers performing functions not related to the main activities of the institution.

Disagreeing with the conclusions of the control body, the institution went to court.

The court's position. Considering the controversial situation, the court proceeded from the following.

By virtue of Art. 38 of the Budget Code of the Russian Federation, the targeted nature of budget funds means that budget allocations and limits on budget obligations are communicated to specific recipients of budget funds, indicating the purpose of their use. At the same time, the law (decision) on the budget establishes the distribution of budget allocations for each main manager of budget funds in the context of codes of sections, subsections, target items and types of expenses of the classification of budget expenses, reflecting the directions (goals) of financing budget expenses.

According to Part 1 of Art. 78.1 of the Budget Code of the Russian Federation in the budgets of the budgetary system of the Russian Federation, budgetary and autonomous institutions are provided with subsidies for the financial support of their implementation of state (municipal) tasks, calculated taking into account the standard costs for the provision of state (municipal) services to individuals and (or) legal entities and standard maintenance costs state (municipal) property.

In addition, from the budgets of the budgetary system of the Russian Federation, subsidies may be provided to budgetary institutions for other purposes. The procedure for their provision is established by the Government of the Russian Federation, the highest executive body of state power of a constituent entity of the Russian Federation, local administration or government bodies authorized by them (state bodies), local government bodies.

Based on Part 1 of Art. 306.4 of the Budget Code of the Russian Federation, misuse of budget funds is recognized as the direction of budget funds of the budget system of the Russian Federation and the payment of monetary obligations for purposes that do not fully or partially correspond to the goals determined by the law (decision) on the budget, the consolidated budget list, the budget list, the budget estimate, the contract (agreement) or another document that is the legal basis for the provision of these funds.

By virtue of Art. 23 of the Federal Law of December 29, 2012 No. 273-FZ “On Education in the Russian Federation” (hereinafter referred to as the Law on Education), the institution refers to professional educational organizations, which recognize educational organizations that carry out educational activities according to secondary vocational educational programs as the main purpose of their activities. education and (or) vocational training programs. Article 12 of this law establishes that educational programs determine the content of education.

The main educational programs include, inter alia, educational programs of secondary vocational education - training programs for skilled workers, office workers, training programs for mid-level specialists.

The educational institution is guided by federal standards containing requirements for the conditions for the implementation of the main educational program, which consist of requirements for psychological, pedagogical, personnel, logistics, financial and other conditions.

At the same time, according to the court, the above-mentioned federal standards do not provide for the mandatory staffing of educational organizations, along with teaching and other employees, as catering workers.

According to Part 1 of Art. 52 of the Law on Education in educational organizations, along with the positions of teaching staff and researchers, provides for the positions of engineering, technical, administrative, production, educational support, medical and other workers performing auxiliary functions.

Based on the content of the above standards in their systemic unity, it is necessary to include workers performing responsibilities for compliance with sanitary and hygienic standards of educational activities, sanitary and living conditions, including maintenance of equipped wardrobes, as well as compliance with health requirements.

The court came to the conclusion that the educational institution did not have the right, at the expense of the subsidy received from the budget of a constituent entity of the Russian Federation for financial support for the fulfillment of the state task for the provision of public services (performance of work), to pay canteen workers.

According to Part 1 of Art. 37 of the Law on Education, the organization of meals for students is entrusted to organizations carrying out educational activities. Providing meals to students at the expense of budgetary allocations of the constituent entities of the Russian Federation is carried out in cases and in the manner established by the state authorities of the constituent entities of the Russian Federation; students studying at the expense of budgetary allocations from local budgets - by local governments.

At the same time, although the organization of meals for students is also included in the protection of their health, the remuneration of workers in the canteen of a secondary vocational educational institution cannot be provided at the expense of subsidies of the constituent entity of the Russian Federation provided for the execution of state assignments, since, by virtue of the direct prescription contained in Art. 37 of the Law on Education, the organization of meals for students is entrusted to organizations carrying out educational activities. Providing meals to students at the expense of budgetary allocations from the budgets of the constituent entities of the Russian Federation is carried out in cases and in the manner established by the state authorities of the constituent entities of the Russian Federation.

Within the meaning of Part 2 of Art. 8 of the Law on Education, state authorities of the constituent entities of the Russian Federation have the right to additional financial support for catering activities for students, but this is not their responsibility.

Please note: funding for student meals is provided through other funds (own and allocated).

It is necessary to take into account the provisions of SanPiN 2.4.5.2409-08 “Sanitary and epidemiological requirements for the organization of meals for students in general education institutions, institutions of primary and secondary vocational education”, approved by the Resolution of the Chief State Sanitary Doctor of the Russian Federation dated July 23, 2008 No. 45, which establish sanitary and epidemiological requirements to the organization of meals for students in educational institutions, regardless of departmental affiliation and forms of ownership, are mandatory for all legal entities and individual entrepreneurs whose activities are related to the organization and (or) provision of hot meals to students.

From the content of clause 2.1 of SanPiN 2.4.5.2409-08 it follows that meals for students in educational institutions are provided by public catering organizations that carry out activities for the production of culinary products, flour confectionery and bakery products and their sale.

Consequently, financial support for catering activities for students in secondary vocational educational institutions is not the responsibility of the constituent entity of the Russian Federation, since this funding is not directly provided for by the state federal educational standards of secondary vocational education.

Exclusion of liability for violation of advertising laws

Insanity

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An individual who was in a state of insanity at the time of the commission of the offense is not subject to administrative liability | Art. 2.8 Code of Administrative Offenses of the Russian Federation:

• that is, he could not realize the actual nature and illegality of his actions (inaction) or direct them;
• due to a chronic mental disorder, temporary mental disorder, dementia or other morbid mental condition.

Urgent necessity

The assistance of a professional lawyer significantly increases the likelihood of a positive outcome of the case.

It is not an administrative offense for a person to cause harm to legally protected interests | Art. 2.8 Code of Administrative Offenses of the Russian Federation:

• to eliminate a danger that directly threatens the personality and rights of a given person or other persons, as well as the legally protected interests of society or the state, if this danger could not be eliminated by other means and if the harm caused is less significant than the harm prevented.

Insignificance

Also, a person may be released from administrative liability and limit himself to an oral remark if the act is insignificant | Art. 2.9 Code of Administrative Offenses of the Russian Federation. The following have the right to release:

• judge;
• organ;
• official authorized to resolve a case of an administrative offense.

what is insignificance

The insignificance of the offense occurs in the absence of a significant threat to protected social relations | Art. 2.9 Code of Administrative Offenses of the Russian Federation. A minor administrative offense is an action or inaction, although formally containing the elements of an administrative offense, but taking into account the nature of the offense committed and the role of the offender, the amount of harm and the severity of the consequences, which does not represent a significant violation of protected public legal relations. It must be borne in mind that, taking into account the signs of the objective side of some administrative offenses, under no circumstances can they be considered insignificant, since they significantly violate protected social relations. These include, in particular, the following administrative offenses:

• driving a vehicle while intoxicated | Art. 12.8 Code of Administrative Offenses of the Russian Federation;
• refusal to undergo a medical examination | Art. 12.26 Code of Administrative Offenses of the Russian Federation.

The following circumstances do not matter:

• personality;
• property status;
• voluntary elimination of consequences;
• compensation for damage caused.

Purchase of breathalyzers using compulsory medical insurance funds

Subject of dispute. The Resolution of the AS VSO dated January 23, 2019 No. A74-5515/2018 considered the dispute between the State Budgetary Healthcare Institution of the Republic of Khakassia “Montenegrin City Emergency Medical Care Station” (hereinafter referred to as the institution) and the Territorial Compulsory Health Insurance Fund of the Republic of Khakassia (hereinafter referred to as the TFOMS). During the inspection, the control body found that the institution misused compulsory health insurance funds aimed at purchasing a breathalyzer (a professional breathalyzer for quantitatively measuring the concentration of alcohol vapor in exhaled air). Disagreeing with the conclusions of the TFOMS, the institution went to court.

The court's position. Considering the controversial situation, the court proceeded from the following.

According to Art. 15 of the Federal Law of November 29, 2010 No. 326-FZ “On Compulsory Medical Insurance in the Russian Federation” (hereinafter referred to as Law No. 326-FZ), a medical organization carries out its activities in the field of compulsory medical insurance on the basis of an agreement for the provision and payment of medical care under compulsory health insurance.

From the provisions of Part 2 of Art. 28 and part 2 of Art. 39 of Law No. 326-FZ it follows that under an agreement for the provision and payment of medical care under compulsory health insurance, a medical organization undertakes to provide medical care to the insured person within the framework of the territorial compulsory health insurance program, and the insurance medical organization undertakes to pay for medical care provided in accordance with territorial compulsory health insurance program. At the same time, the medical insurance organization sends targeted funds to the medical organization to pay for medical care under contracts for the provision and payment of medical care in the amount and under the conditions established by the territorial compulsory health insurance program.

Clause 5, Part 2, Art. 20 of Law No. 326-FZ establishes the obligation of a medical organization to use compulsory medical insurance funds received for medical care provided in accordance with compulsory medical insurance programs.

By virtue of Part 5 of Art. 26 of Law No. 326-FZ, TFOMS expenses are carried out, among other things, for the purpose of financial support for the implementation of territorial compulsory health insurance programs. Expenditure of funds from TFOMS budgets for other purposes is not provided.

According to clause 158 of the Rules of Compulsory Medical Insurance, approved by Order of the Ministry of Health of the Russian Federation dated February 28, 2011 No. 158n (hereinafter referred to as Rules No. 158n), the calculation of tariffs includes the costs of a medical organization directly related to the provision of medical care (medical services) and consumed in the process provision, and costs necessary to ensure the activities of the medical organization as a whole, but not consumed directly in the process of providing medical care (medical services).

Costs directly related to the provision of medical care (medical services) include, among other things, labor costs and accruals for wage payments for personnel directly involved in the provision of medical care (medical services); other costs directly related to the provision of medical care (medical services).

Clause 158.2 of Rules No. 158n establishes that costs necessary to ensure the activities of a medical organization as a whole, but not consumed directly in the process of providing medical care (medical services), include costs that cannot be directly attributed to costs directly related to the provision of medical care (medical services).

Based on clause 158.3 of Rules No. 158n, the costs necessary to support the activities of a medical organization as a whole include, in particular, the following cost groups: costs for the purchase of transport services; labor costs and charges for wage payments for employees of medical organizations that are not directly involved in the provision of medical care (medical services) (administrative, administrative, administrative, support and other personnel not directly involved in the provision of medical care (medical services)).

Rules No. 158n do not contain a closed list of employees of medical organizations who are not directly involved in the provision of medical care, but are necessary to ensure the activities of the medical organization as a whole. In each specific case, the question of whether the activity of the relevant employee is necessary to ensure the activities of the medical organization in the implementation of compulsory medical insurance must be considered taking into account all applicable compulsory medical insurance programs and the responsibilities assigned by these programs to medical institutions.

Resolution of the Government of the Russian Federation dated December 19, 2016 No. 1403 approved the Program of State Guarantees for the provision of free medical care to citizens for 2022.

By Decree of the Government of the Republic of Khakassia dated December 29, 2016 No. 655, the Territorial Program of State Guarantees for the provision of free medical care to citizens in the territory of the Republic of Khakassia for 2022 was approved.

At the same time, in both the federal and territorial programs for 2017, the types of free medical care (types of medical services) are differentiated by funding sources: from the federal, regional, local budgets, as well as from compulsory medical insurance funds.

At the same time, the procedures and standards for the provision of medical care within the framework of the compulsory health insurance program do not include driver examination services.

For your information:

the courts came to the conclusion that the institution’s expenses for purchasing a device to determine the level of alcohol in the blood for examining vehicle drivers at the expense of compulsory medical insurance funds are a misuse of funds.

What aggravates responsibility

A judge, body, or official imposing an administrative penalty, depending on the nature of the administrative offense committed, may recognize the following circumstances as aggravating | Art. 4.3 Code of Administrative Offenses of the Russian Federation:

• continuation of illegal behavior despite the demand of authorized persons to stop it;
• repeated commission of a similar administrative offense;
• involvement of a minor in committing an administrative offense;
• commission of an administrative offense by a group of persons;
• committing an administrative offense during a natural disaster or other emergency circumstances;
• committing an administrative offense while intoxicated or refusing to undergo a medical examination for intoxication if there are sufficient grounds to believe that the person who committed the administrative offense is in a state of intoxication.