The Decree sets forth the procedure for grant provision and distribution from the federal budget in favour of the constituent entities of the Russian Federation for implementation of measures to modernise regional pre-school education systems

Decree of Russian Government No 459 "On Provision and Distribution of Grants from the Federal Budget in favour of the Budgets of the Constituent Entities of the Russian Federation for Implementation of Measures to Modernise Regional Pre-School Education Systems in 2013", as of June 3, 2013 (hereinafter - the "Decree") has been approved as a measure to execute Presidential Decree No 599 "On Measures of Implementation of the State Education and Science Policy", as of May 7, 2012. The Decree No 459 aims at providing a full availability of pre-school education for children aged 3 - 7 years through construction of new kindergarten buildings and development of diverse pre-school education forms. According to a memorandum to the draft Decree, federal budget funds are to be used for financing of 433 000 vacancies in pre-school institutions that will be in demand by 2016. In addition, according to regional "roadmaps", 1,188 mln. of new vacancies will be provided in pre-school institutions.

Following the above, it is assumed that constituent entities that are in need of a better availability of pre-school education for children aged 3 – 7 by 2016 shall send applications to Russian Ministry of Education and Science (hereinafter – Russian MoES) for grants co-financing the infrastructure facilities shortfall. The form of investments in the infrastructure facilities has not been set forth.

Thus, it can be concluded that federal budget funds will be available to finance the costs of a constituent (municipal) entity of Russia for the construction and reconstruction of buildings for educational institutions under PPP agreements. However, terms within which grants are to be provided are limited to the current financial year (2013) and to the planning period (2014 and 2015).

Amendments to the Federal Law "On the Federal Budget for 2013 and for the Planning Period" were approved on May 24, 2013. According to the amendments, Russian MoES has allocated budgetary funds to execute the Decree.

Grant provision procedure includes an agreement between Russian MoES and a constituent entity's supreme executive body on financing the entity's expenditure obligations to implement a set of arrangements aimed at modernising the entity's regional pre-school education system (hereinafter – a "roadmap"), as well as approval of grant distribution by Russian Government. "Roadmaps" have been adopted by the most of the constituent entities of Russia, and some of them provide the construction of pre-school education facilities on a PPP basis.

The amount of grants will be determined on the basis of an application submitted by the relevant constituent entity and a formula provided by the Decree. The formula includes various indicators, such as the total amount of federal budget funds allocated to modernise the pre-school education system, the number of children aged between 3 and 7 and the level of calculated budget availability of the relevant constituent entity.

Conditions of grant provision include the following key provisions:

  1. availability of budgetary allocations for the relevant constituent entity of Russia for the performance of its expenditure obligations;
  2. availability of a "roadmap";
  3. programmes to implement preschool education federal state standards, including preliminary training for teaching personnel and advanced training for teaching and management personnel in pre-school educational institutions, as well as implementation of such programmes;
  4. "roadmap" arrangements (meeting targets reflecting the development of pre-school education).

At the moment, if a constituent entity of the Russian Federation wishes to receive a grant, it shall ensure that the relevant "roadmap" shall contain a schedule of measures aimed at meeting a 100% availability target in relation to pre-school education for children aged 3 – 7 by 2016. Such plan shall include, inter alia:

  1. reconstruction, major and minor repairs of buildings for pre-school educational institutions;
  2. construction of buildings for preschool educational institutions;
  3. development support for a nonstate pre-school education sector.

Constituent entities to be provided with grants will be selected on the basis of a demand in pre-school education availability increase for children aged between 3 and 7. If there is such demand and the relevant constituent entity meets the conditions mentioned above, then Russian MoES executes a grant agreement with the entity, with the following terms and conditions determined by the Decree:

  1. on the amount of grants and terms of their provision (as well as conditions for their provision and expenditure);
  2. on efficiency indicator values in relation to the grant;
  3. reporting terms and procedures for the constituent entity (the Decree provides reporting on a quarterly basis) + information on efficiency indicator values (in the form provided by Russian MoES);
  4. consequences of failure to meet the efficiency indicators;
  5. a step plan for introducing additional vacancies (according to the "roadmap") containing information on the cost of each such vacancy (for arrangements related to capital contributions)
  6. other terms and conditions specified in the Decree (see p. 7 of the Decree).

The co-financing amount for the purposes of regional budget obligations shall be determined on a percentage basis in relation to the amount of expenditure obligations of the constituent entity and shall be not less than 20 % and not more than 80% from the amount of such obligations. In the meantime, the co-financing amount for the purposes of co-financing regional obligations with the federal budget is inversely related (a double ratio is applied) to the level of the relevant entity's budget availability.

Efficiency assessment of expenditures financed by a grant, as well as the fulfilment of conditions for such grant to be provided shall be carried out by Russian MoES on the basis of comparison between planned and met values of the following grant efficiency indicators:

  1. the number of vacancies for the purposes of pre-school education programmes implementation, created in the course of a "roadmap" implementation process;
  2. the number of children aged 3 – 7 awaiting pre-school education;
  3. balance between the salary of preschool educational institutions teaching personnel and the average salary of basic education personnel in the relevant constituent entity;
  4. increase in the number of teachers and managers in pre-school educational institutions that have attended advanced training or professional retraining during the last 3 years.

It should be noted that the assessment of "roadmap" implementation efficiency in certain constituent entities of the Russian Federation shall be carried out using a much lower number of criteria. Thus, a long-term target programme "Pre-School Educational Institutions Network Infrastructure Development for the Arkhangelsk Region for 2012 - 2016 and for a Longer Term till 2028"1 provides only two criteria: (1) the number of newly created job vacancies and (2) the number of children between 1 and 7 years of age awaiting pre-school education. It means that in order to raise funds for co-financing purposes from the federal budget, some constituent entities of Russia will have to amend "roadmaps" (a similar provision is set forth in sub-points of point 4 of the Decree).

Russian MoES may pass a resolution to reduce the amount of grants if one of the following events occurs:

  1. efficiency target indicators (set forth by the agreement) have not been met in the report year;
  2. the constituent entity of Russia has not performed its expenditure obligations for which the grant was provided;
  3. there is no demand in the grand in an extent it was approved for the relevant financial year.

The Decree is broad to the maximum extent and entitles the constituent entities of the Russian Federation to determine the means and forms to perform obligations under "roadmaps" at their own discretion.

The document comes into force 7 days after its official publication date (the document has not been published yet).