Introduction of Normative Funding in Cultural Sector: Analysis of Regional Practices

Abstract

The research included an analysis of practices and approaches applied in Russia’s regions to define standard/normative costs for the public services delivery and standard costs for the public institutions’ property maintenance when calculating funding provided to deliver public services, commissioned by the state in the cultural sector.

The study was conducted on 83 subjects of the Russian Federation by analyzing open access normative legal acts published by April 1, 2014, by using open access data of the legal reference system Consultant Plus (a consolidated database of regional laws) and the web-sites of higher executive authorities and executive bodies of the Russian Federation’s subjects.

The study reveals that not all of the subjects of the Russian Federation approved local methodological guidelines on defining standard costs (77.1 per cent) and even fewer regions have industry-specific procedures to be used when calculating standard costs (56.6 per cent).

The analysis identified three main approaches used to define the structure of standard costs depending on the allocation of funds to general economic needs.

The analysis also shows that currently the methodology to define standard costs in the cultural sector is in an initial stage of its development and has not yet played any significant role. Most of the surveyed regions use individual standard costs. And a significant part of the regions use in the calculations regular (budgeted) expenses for each public institution, thereby ensuring formal compliance with the requirements of the Federal Law No. 83-FZ. In some regions, they use adjusting factors that in most cases negate the very idea of normative financing and in fact help maintain the budget financing principles with all their shortcomings.