The Combination of Public and Private Legal Instruments in Budget Financing

The paper is devoted to the study of the issues associated with the application of civil law instruments for budget funding. Thus, on the basis of the results of the study, the author comes to the conclusion that convergence of public and private legal instruments is increasing. As an example of the use of private legal instruments for budget funding the author employs the practice of using treasury leters of credit for the purpose of hedging public spending. The internal state financial control having been transferred to the Federal Treasury, the use of calculations covered by letters of credit becomes a key instrument to secure effective monitoring of budget spending. The letter of credit can significantly increase transparency of cash flows, which contributes to the reduction of unfair suppliers in the chain of subcontractors. The Treasury letter of credit provides transfer of advances in the amount of actual demand. The paper also analyzes the practice of using such instruments as treasury support and authorization of financial transactions that are the cornerstones of the current budget control. From the author's standpoint, in the nearest future we will be able to identify the following objectives of the development of the Treasury support system with the use of settlements covered by letters of sredit. First and foremost, we need further integration of Treasury and banking support, and full-scope implementation of treasury letters of credit when providing Treasury support. Special attention should be paid to the development of approaches to integration of treasury letters of credit into the process of banking support of governmental contracts. It is necessary to expand the treasury support over advance payments funds employed for contracts (agreements) of delivery, performance of works, providing services that are concluded with the federal budgetary and autonomous enterprises at the expense of subsidies assigned from the Federal Budget. We should use treasury support and budget monitoring of investment objects that are annually included into the Federal Targeted Investment Programme. At the same time, Treasury support must be integrated into budget monitoring.

budget financing, budget control, financial control, Treasury letter of credit, Treasury support, authorization of treasury transactions, government contracts, budget process

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