The expenses of each municipal or state body are made in strict accordance with the approved plan. In addition, based on the results of the past calendar year, the validity of all expenses will be subject to verification for compliance with the previously approved cost estimate.
In this regard, payment for each concluded government contract must initially be included in the budget. Expenses for goods, works or services not provided for in advance are not allowed.
In addition, payment for the goods received must be made to the proper person. Violation of the considered rules in the field of tenders, procurement, bidding often indicates misuse of budget funds. That’s when you need the help of our lawyer, who will build a line of defense and defend your rights: professionally, on favorable terms and on time.
Types of misuse of budget funds
Misuse is possible in the following cases:
- Unplanned expenses . This point is formal and consists of exact compliance of the costs incurred with the budget plan approved at the beginning of the year.
- Early payment . Any costs must be justified. Regarding the government contract concluded as a result of the tender, attention should be paid to the terms of payment for work or services. In this part, the government agency does not have the right to make payments in violation of the agreed schedule. This fully applies to payment for services not provided and goods not received. In this regard, the conclusion and subsequent execution of a government contract on an advance payment basis is also not allowed.
- Excessive payment . A state or municipal body must prioritize the supplier with the lowest price offer. Under such circumstances, the obligatory condition of the competition for the supply of goods must be the contract price. Conclusion and payment for work whose cost exceeds the market average may indicate inappropriate and unreasonable spending of budget funds.
- Payment to an unauthorized person . Even after actually receiving work (services), the government agency should be extremely careful in paying for what was received. The bill must be paid exclusively to the eligible legal creditor. In this part, the relevant issue is the acceptance of the assignment agreement and making payment to the new creditor. Such an agreement requires careful verification, since if it is insignificant, it may raise the issue of misuse of budget funds. In addition, the same clause applies to payment for services to a company that is unable to provide them. For example, payment for legal assistance to a construction company may be considered inappropriate.
- Purchase of non-core goods . Due to the fact that each government body has the goals and objectives of its work, the acquisition of any goods/works/services must be fully consistent with such goals. In this regard, it should be noted that in this case, inappropriate spending of budget funds is possible even with planned spending on unnecessary goods.
The issue of misuse of budget funds is considered in each case independently. Therefore, the above list of situations is obviously not final.
Administrative responsibility for misuse of budget funds
The consequence of violating the procedure for spending the state budget is the initiation of a corresponding case for an administrative offense. At the same time, the composition of an administrative violation under Article 15.14 of the Code of Administrative Offenses of the Russian Federation is limited to one and a half million sums.
It is important to note that the illegal recipient of budget funds may also be held accountable. For this purpose, the authorized body will consider the issue of intentions and purposeful actions on the part of the organization, which led to the illegal expenditure of the budget.
The amount of punishment for a civil servant varies from twenty to fifty thousand. In this case, instead of a fine, disqualification may be imposed for no more than three years, which will deprive the possibility of further work during the specified period as a civil servant.
For the recipient of illegally spent budget money, liability depends on the amount received. The minimum penalty will be five percent. Its limits are 25% of the amount of misappropriation of funds.
Read more about defense tactics in cases of administrative offenses and the work of our administrative lawyer by following the link on the main part of the site.
Misuse of budget funds
In this case, two types of liability are possible: administrative and criminal.
Administrative liability is provided for in Article 15.14 of the Code of Administrative Offenses of the Russian Federation. It occurs when budget funds are directed and obligations are paid for purposes that do not correspond to budget goals. Simply put, money is spent in whole or in part for purposes other than those for which it was received. Both the official who committed the violation and the organization (institution, authority) in which this official works can be held accountable. Fine for individuals – 2-50 thousand rubles . Instead of a fine, disqualification for a period of 1-3 years is possible. Responsibility for organizations is only penalties, which amount to 5-25% of the amount spent inappropriately.
People are held administratively liable on a residual basis – if there is no criminal offense. Criminal liability (Article 285.1 of the Criminal Code of the Russian Federation) arises for the same actions, but committed on a large scale (1.5 million rubles and more) or especially large (7.5 million rubles and more). In this case, a specific official of the recipient of budget funds will be responsible.
The punishment varies:
- In case of large amounts of non-targeted expenses (Part 1 of Article 285.1):
- a fine of 100-300 thousand rubles or in the amount of salary for 1-2 years;
- forced labor for up to 2 years with or without disqualification for up to 3 years;
- arrest up to 6 months;
- imprisonment for up to 2 years with or without disqualification for up to 3 years.
- When committing a crime under Part 1 of Art. 285.1, by a group of persons by prior conspiracy or in case of a particularly large amount of inappropriate spending, the possible punishment will be greater:
- a fine of 200-500 thousand rubles or in the amount of salary for 1-3 years;
- forced labor for up to 5 years with or without disqualification for up to 3 years;
- imprisonment for up to 5 years with or without disqualification for up to 3 years.
In case of misuse of extra-budgetary funds (PFR, FFOMS, Social Insurance Fund) on a large or especially large scale, criminal liability arises under Art. 285.2 of the Criminal Code of the Russian Federation. This provision provides for similar sanctions. Here, inappropriate spending refers to those that do not correspond to the goals and conditions of spending established by laws and the fund’s budget.
Bringing to administrative or criminal liability does not exclude other negative consequences. Thus, the guilty official may be subject to disciplinary action. In turn, an organization that misuses funds allocated from a higher budget may subsequently lose funding for certain purposes or receive it in a reduced form.
Criminal liability for misuse of budget funds
In case of reaching or exceeding the one and a half million threshold of inappropriate expenses, liability for such acts is provided for by criminal law.
Depending on the number of persons involved (co-perpetrators of the crime), as well as the amount of money illegally withdrawn from the budget, Article 285.1 of the Criminal Code of the Russian Federation defines a sanction of up to five years in prison.
Similar to administrative punishment, criminal punishment may also include a ban on further work of a state or municipal employee.
Also watch the video with advice from a criminal lawyer, they are universal for any case of criminal prosecution and can be taken as the basis for your steps:
Judicial practice under Article 285.1 of the Criminal Code of the Russian Federation
Determination of the Constitutional Court of the Russian Federation dated June 27, 2017 N 1416-O
As follows from the presented materials, by the court verdict of August 12, A.A. Migulya was convicted of committing crimes, including those provided for in paragraph “b” of part two of Article 285.1 “Misuse of budget funds” of the Criminal Code of the Russian Federation. The appellate instance, having established that the relevant act was committed by A.A. Miguley in the period from June 8, 2006 to December 26, 2006, a criminal case on his grounds was initiated on July 20, 2011, and due to evasion of criminal prosecution in another criminal case, he was put on the wanted list on May 30, 2011 and detained on May 12 2015, came to the conclusion that the statute of limitations for criminal prosecution did not include the time from the date of initiation of the criminal case until the arrest of the accused. Taking into account the fact that the statute of limitations for bringing to justice for the crime provided for in paragraph “b” of part two of Article 285.1 of the Criminal Code of the Russian Federation expired during the period of appeal, the court, by an appeal ruling dated February 15, changed the sentence, releasing A.A. Quickly from the punishment imposed for committing this crime.
Determination of the Judicial Collegium for Criminal Cases of the Supreme Court of the Russian Federation dated March 14, 2017 N 46-UD17-6
In the cassation appeal, the convicted Sorochaykin A.N. challenges the legality and validity of the court decisions taken against him and asks for their review, indicating that the court's conclusions about his guilt in committing fraud do not correspond to the actual circumstances of the case; the verdict and subsequent court decisions are subject to review due to incorrect application of the criminal law; the sentence against him is unfair and was passed in violation of Art. 297 Code of Criminal Procedure of the Russian Federation; his actions upon receipt of the subsidy should be qualified under clauses “a”, “b”, part 2 of Art. 285.1 of the Criminal Code of the Russian Federation, asks to terminate the criminal case on this act due to the expiration of the statute of limitations, or to reclassify his actions on this fact under Art. 159.4 of the Criminal Code of the Russian Federation; claims that he was unfoundedly convicted for this act, since in the case materials there is an unreversed decision to terminate criminal prosecution against him due to the absence of corpus delicti in his actions; in connection with the theft of funds from citizens participating in shared construction, the verdict was based on an act of comprehensive accounting and construction expertise, which was carried out in violation of Art. 198 of the Code of Criminal Procedure of the Russian Federation, while the expert opinion cannot be considered reliable and admissible evidence; draws attention to the fact that the court did not specify his actions and, accordingly, his guilt in committing the crimes charged against him was not established; a number of contracts, the failure of which he was charged with, were concluded by other construction organizations, but the court did not take this fact into account; believes that the court incorrectly qualified his actions under Part 4 of Art. 159 of the Criminal Code of the Russian Federation, since they were committed in the field of entrepreneurial activity. In addition, it indicates that the court overestimated the amount of the civil claim in favor of the CJSC "...", and also did not provide evidence of the stated claims; asks to lift the seizure of the property of individuals who are not convicted in this case and to mitigate the punishment.
Resolution of the Presidium of the Supreme Court of the Russian Federation dated October 13, 2021 N 44-P21
according to Part 2 of Art. 285.1 of the Criminal Code of the Russian Federation for 2 years; on the basis of Part 2 of Art. Criminal Code of the Russian Federation for aggregation of crimes for 2 years 6 months with deprivation of the right to occupy leadership positions in state municipal bodies for a period of 2 years.
How to build protection against misuse of budget funds
In the vast majority of cases, the issue of misuse of budget funds is closely related to payment for non-existent, unprovided services or goods not received. Thus, the priority issue in the defense (equivalently in an administrative or criminal case) will be the presentation of evidence of the reality of the cut work. It is also important to confirm the qualifications of the contractor - to prove that this particular company offered the minimum price, and that the company has the necessary specialists on its staff.
To achieve these goals, the following documents must be submitted:
- Government contract with all available additional agreements
- Competitive documentation of the tender carried out
- Estimated contract costs
- Possible invoices – goods, cargo, etc.
- Certificates of completed work
- Constituent documents of the executing company
- Supplier staffing table
- Balance sheet of the government contract executor
- And others
Additionally, as part of the consideration of the case, the court will determine the issue of planning such expenses. Accordingly, attention should be paid to the cost estimate approved by the authorized person.
If it is impossible to independently obtain the necessary evidence of the reality of the work, this can be done with the help of law enforcement officers or the court.
The main thing : the defense strategy is always individual for each individual case. The given important circumstances are exemplary and most often encountered in the practice of considering such cases and, naturally, are not complete. For each case, defense tactics should be developed taking into account specific facts and necessarily taking into account the possibility of proving the necessary circumstances. And it is important to start acting with a lawyer so as not to make mistakes. That’s why call and schedule a consultation with us today, our lawyer will build a full defense in your case.
