The Implementation of Ineffective Regional Expenditure Assessment in the Decision-making Process of Grants Allocation

An urgent task in the period of economic recession and decrease in revenue base is to carry out the optimization of regional expenditure, that will help to maintain their budget stability. At the Federal level it is necessary to create and support appropriate conditions, which will be stimulating Russian regions to minimize the amount of inefficient expenditure. One of the possible decisions is to implement the results of ineffective regional expenditure assessment in the decision-making process of federal aid allocation and grants calculation. Author presents and characterizes three approaches for ineffective regional expenditure assessment: restrictive approach, approach based on standards and service costs auditing and planning-programming indicative performance approach.The article includes an example of the complex methodology for inefficient budget expenditure assessment of the Russian regions. The results of such a complex methodology can be integrated in the process of general and incentive grants allocation. The implementation of the results will enable to strengthen control over the budget financing on the regional level. The analysis of the effectiveness on a wide range of expenditure items will also allow to identify reserves for possible optimization.