Validation of expenses - what is it?

Validation of expenses of budgetary organizations involves the establishment and bringing up of limits on obligations, control and accounting for their adoption. It is necessary in order to prevent the adoption of obligations that are not secured by appointments defined by budget legislation. Validation of expenses of a budgetary institution is carried out taking into account the implementation of budget revenue items.

Main stages

The procedure for authorizing expenses is regulated by budget legislation and other industry regulations. Validation is carried out as follows:

1. A consolidated budget list is compiled and approved.
2. Budget allocations are approved and communicated to fund managers and recipients. For them, approved income estimates.
3. The limits of obligations accepted by the recipients of funds are agreed and communicated.
4. Confirmation and reconciliation of fulfillment of obligations is carried out.

Summary painting

Financing of recipients and managers of funds is allowed strictly in accordance with the designations. They are provided for in the annual budget list with mandatory quarterly distribution.

As indicated in article 217 of the BC, the list is the body responsible for the formation of the draft budget (at the appropriate level). She is approved by the head of the financial structure (for the federal budget - the head of the Ministry of Finance of the Russian Federation, for the regional - the minister of finance of the subject) and sent to the treasury.

The basis for the compilation is the murals formed by the main managers of the funds in accordance with the codes of the economic and functional classification of budget expenditure items with a quarterly breakdown.

Income estimates

The budget institution receives the right to use the funds only after the approval of the document determining their volume, quarterly distribution, and target direction.

Income and budget estimates are formed on the basis of notification of appropriations. It is communicated to the institution by a higher manager.

Changes to the summary list

According to the provisions of the BC, adjustments can be made if:

1. A mode of budget spending reduction has been introduced.
2. Income items are executed in excess of the amounts provided for in the legislation or the decision on the corresponding budget.
3. The principal manager has moved appropriations between recipients.

Limits

The implementation of the treasury system for the implementation of budget items has led to the emergence of new procedures. In the banking scheme, many of them are absent. New procedures in the framework of authorization of expenditures are the establishment of limits, the adoption and confirmation of obligations.

Limits are the basis for financing costs. They reflect the maximum amount of rights of the recipient to accept financial obligations. Limits are set based on indicators present in the consolidated list. At the same time, the forecast of revenues and sources of funds to cover the budget deficit is taken into account.

The Treasury through its bodies brings limits to the main managers. They, in turn, bring them to the recipients.

One of the key steps in authorizing costs is control. Approved limits must be submitted to the relevant treasury body. He, in turn, provides control over spending.

Acceptance and confirmation of obligations

Acceptance of obligations should be understood as the conclusion by the recipient of funds of agreements with organizations providing him services (performing work for him), within the limits.

Confirmation is the verification of compliance of payment documents with limits and approved expenditure estimates. It is conducted by a body authorized by the Treasury. The check precedes the debit of the account .

Validation of expenditures, thus, eliminates the possibility of accepting for financing payments and costs not provided for by the budget or not provided with income and sources of financing the budget deficit.

Accounting

The rules for its maintenance are determined in Sec. 5 hours III of Instruction No. 148 (approved by order of the Ministry of Finance of 30.12.2008). Accounting for authorization of expenses includes accounting for operations:

• with limits of obligations;
• with estimated appointments for profitable activities and commitments made.

Accounting is based on the primary documentation established by the financial structure of the corresponding budget. Accounting is carried out with the reflection of correspondence under the articles of authorization of expenses. This rule is enshrined in paragraph 239 of the Instructions.

KBA accounts

Accounting for the approved limits of obligations is carried out on the account. 050100000. This is stated in paragraph 241 of the Instructions. Accounting for commitments made in the current year is carried out according to budget expenditure codes using accounts:

• 150201000;
• 250202000.

The first account is used to summarize the amounts of obligations assumed within the appropriations / limits approved for it for the corresponding financial period (year).

On the count. 250202000 the recipient takes into account the amount of obligations that were accepted as part of the expense-income budget for profitable activities, the volume of appointments for the current / next year, changes made to the obligations. The relevant provision is contained in paragraph 251 of the Instructions.

Analytics

Analytical accounting for the obligations undertaken by the institution is carried out in accordance with documents confirming their acceptance according to the list approved by the financial authority, the administrator of the sources of deficit coverage or the recipient of funds. Indicators are reflected in the Journal (f. 0504064).

Accounting records

When authorizing the costs of posting to bring limits and accept obligations within them, the following entries are made:

• DB 150115000 150113000 - shows the sums of the limits of obligations communicated to the recipient in the prescribed manner, the amount of adjustments made during the reporting (financial) year, in accordance with the notification of limits.
• DB 150113000 150113000 - details of indicators communicated to the recipient of limits by codes of sub-articles, articles of KOSGU are shown. If the limits were adjusted without a breakdown by COSGU, the amount of adjustments made during the year is also reflected.
• DB 150113000 150211000 - the amount of obligations accepted by the recipient is taken into account within the limits and changes made during the year.

Cost authorization transactions for profitable activities are as follows:

• DB 250411000 250412000 - the amounts of appointments (adjustments) are taken into account at the institution’s expenses approved by the expense and income budget.
• DB 250412000 250212000 - shows the amount of the institution’s obligations accepted within the limits of appointments approved for the corresponding reporting period.

In case of reduction of the limits of obligations, entries are made on the basis of the “red reversal” principle with a “-” sign. The corresponding rule is provided in paragraph 239 of the Instructions.

CWR

In 2015, significant changes occurred in the procedures for authorizing expenses. This was primarily expressed in the fact that budget execution from this year began to be carried out without the use of KOSGU codes for CWR (expense type codes) of the budget. These codes are given in Guidelines No. 65n. They are divided into the following groups:

• 100 - expenses for employee benefits;
• 200 - purchase of services, goods, works for municipal / state needs;
• 300 - social security and other payments to the population;
• 400 - capital investments in immovable objects of municipal / state property;
• 500 - inter-budget transfer operations;
• 700 - municipal / state debt service;
• 800 - other appropriations.

State institutions

The transition to the execution of budget items on the CWR means that the founders of such organizations do not have details of the allocated limits on obligations under the COSGU.

In 2016, the provisions of Instruction No. 162n were amended. The changes primarily affected expense authorization accounts.

In accordance with the current version of the Instruction, for most of the 500 accounts, accounting is carried out in the context of the relevant analytical articles. The latter, in turn, must be approved as part of the financial policy of the institution.

Operation Reflection

When authorizing the expenses of a public institution, the following shall be indicated in transactions on 500 accounts:

• Accepted obligations. These include obligations established by legislative (other legal document) to provide funds from the corresponding budget in a financial year. The amounts are determined on the basis of procurement notices using competitive methods for determining the supplier, placed in the UIS (unified information system), in the amount of the maximum (initial) cost of the contract.

• Obligations of a participant in budgetary relations. These obligations stipulated by law, other normative act, agreement / contract shall be borne by a public legal entity (an institution acting on its behalf). It undertakes to provide the individual or organization, subjects of international law, other public law education with budgetary funds in the corresponding year.
• Cash liabilities. These include the obligation of a public institution to pay a certain amount of funds under the terms of civil transactions, agreements / contracts, drawn up in accordance with the requirements of applicable law.

Validation of contracted costs

The procedure for reflecting relevant transactions is significantly affected by procurement law. Planning is done by creating, approving and maintaining time schedules and procurement plans.

When authorizing the expenses of a state institution, the amount of obligations that are accepted in the amount of the maximum (initial) value of the contract with the contractor (contractor / supplier) selected using competitive methods are reflected as follows:

• Db sc 0 50 113 000 Cd 0 50217 000 - taken into account obligations assumed in accordance with the notice.
• Db sc 0 50113 000 (0 50 217 000) Cd 0 50211 000 - reflects obligations under the concluded contract.

Validation of Expenditures in 2017

The procedure for summarizing information on operations was changed by order of the Ministry of Finance No. 209n of November 16, 2016. In particular, the Unified Chart of Accounts was supplemented. Changes took effect on Jan 1. 2017. Validation of expenses includes operations related to advance cash liabilities. The plan is supplemented by the following articles:

• 050203000 - it summarizes information on accepted advance monetary obligations;
• 050204000 - here reflect information on performance obligations;
• 050205000 - data on fulfilled obligations are summarized on this account.

End of current year as part of budget spending authorization

At the end of the year, the balances on the analytical accounts of fulfilled obligations and planned appointments for receipts, payments for the next year are not transferred.

In paragraph 312 of Instruction No. 157n, a paragraph is included according to which indicators of obligations of the current period should be re-registered in the year following the reporting year. An exception is provided for duties performed.

Analytics changes

According to the amendments of paragraph 313 of the above Instructions, the record of obligations posted on authorization accounts is kept in the context of:

• creditors (their groups), contractors, contractors, sellers / suppliers and other counterparties in respect of whom obligations have been assumed;
• contracts / contracts;
• other analytics required by accounting policies.

Registration of operations is carried out in the Journal in accordance with the primary documentation approved by the institution.

Application cf. 050200000

General rules are provided for in Instruction No. 157n, in paragraph 318. By Order of the Ministry of Finance No. 209n, this paragraph was changed.

As indicated in the new edition, cf. 050200000 is intended to reflect the indicators of obligations in the current (next) financial year, the 1st and 2nd years of the planning period and other regular years beyond its scope, changes made to the indicators not only directly by institutions, but also by the Treasury bodies.

Accounting is based on documentation confirming the occurrence (acceptance) of obligations. In this case, the data of the list established by the institution within the framework of the financial policy are used, based on the documentation requirements determined by the financial authority or the Treasury.

Example

Consider the rules for reflecting operations with the following input data:

• The budget institution, using competitive methods to determine the supplier, has signed a contract for the supply of equipment, the cost of which is 800 thousand rubles.
• The maximum (initial) purchase price is 900 thousand rubles.
• Under the terms of the contract, the institution must pay an advance of 30% of the contract price - 240 thousand rubles.
• After the conclusion of the contract, the contractor received an invoice in the amount of the advance paid by the customer.
• When the equipment was shipped, an invoice was issued and a TORG-12 consignment note was drawn up. They reflect the cost of delivery - 800 thousand rubles.
• The customer paid for the contract, taking into account the advance payment. The final payment amount amounted to 560 thousand rubles.

The institution’s operations were carried out as part of an activity that was funded by subsidies to fulfill the founder’s tasks. The reflection of actions will be as follows.

Additionally

It should be noted that Instruction No. 174n was supplemented by correspondence of accounts for recording operations on the amounts of deferred obligations accepted by institutions.

Thus, the provisions of paragraphs 166 and 167 have been updated. Credit score n. 050299000 reflects the value of deferred liabilities, which is determined at the time of conditional (settlement) acceptance, or the time of fulfillment of which has not been established. At the same time, a reserve of future expenses should be created in the institution.

Approved Collateral

Accounting for the amounts that are approved by the organization’s financial and business operations plan for the relevant years, estimated assignments for receipts is carried out on the account. 050700000. Analytics on it is carried out by type of income (or codes if available).