Accounting practices at St Petersburg University: past and present
I think you would agree that in order to manage something, you need to know what you are managing. Until 2008, no one at St Petersburg University (including the Rector!) knew the exact number of buildings and their condition; the number of staff and students; the number of academic departments; the number of places in the halls of residence; the number of library holdings and their condition; and the number of academic programmes. No one kept records of powers of attorney (including general powers of attorney) for property management and financial and economic activities. The lack of a unified system of accounting and records management regarding human resources, property, grants and other resources undermined the unity of the University, its economy and had an overall negative impact on the University’s operations.
Examples from the life of the University show that efficient and accurate accounting and record-keeping practices are essential for the University’s operations. Elena Trofimova, Chief Accounting Officer, Head of the Accounting and Financial Control Department, talked about how accounting and record-keeping practices were organised at St Petersburg University in the past and how they are organised now (On the way to a unified university: Vice-Rectors for the areas of study).
The lack of a unified system of accounting and records management regarding human resources, property, grants and other resources undermined the unity of the University, its economy and had an overall negative impact on the University’s operations.
- According to the data from the Financial Planning Department, the Accounting Department and the Human Resources Department, at the end of 2008, St Petersburg University had, respectively: 11,000; 15,000; and 16,000 employees (Minutes of the Rector’s meeting held on 11 April 2011)
- About the number of the University’s real estate properties, the staff could hear the University’s leaders refer to: "more than 600 University buildings"; "around 500 University buildings", or even "400 University buildings" (Why have St Petersburg University’s property rights not yet been formally registered?)
- In the early 2000s, a Committee of University Deans composed of: Nikolay Kropachev, Dean of the Special Faculty of Continuing Legal Education; Ivan Boiko, Dean of the Special Faculty of Continuing Education in Economics; and Iurii Kovalev, Dean of the Special Faculty of Continuing Education in Psychology, conducted an inventory of the University’s real estate properties. It turned out that more than 50 buildings were imperceptibly (!) transferred to commercial users (for instance, the building on the 1st Line of Vasilyevsky Island, located next to the building of the Faculty of Journalism, which was then headed by Marina Shishkina)
- In 2000-2001, buildings located at: 2/11 9th Line of Vasilyevsky Island (4,550.1 sq. m.) and 15 6th Line of Vasilyevsky Island (4,106.9 sq. m.) were handed over to the University. In less than a year after the transfer, some premises in these University buildings were leased to restaurants Aivengo and Biergarten (Lease of the University’s Property: Past and Present; What happened to the Restaurant at the Faculty of Philology?)
- In 2006, Sergey Bogdanov, the then Dean of the Faculty of Philology and Arts, initiated the transfer of the Water Tower building located at 3A Slutskaya Street, Pavlovsk, St Petersburg to St Petersburg University for operational management. Apparently, there were plans to open a café in this building, situated next to the Pavlovsk Park. The Water Tower, however, with its area of 23 sq. m., was unsuitable for the needs of the University as an educational and research organisation in the first place. When the Rector learnt about this, he asked Sergey Bogdanov to explain why the University needed this facility. The answer was that art students would store their easels there when they have plein-air practice. Yet, during the entire period that the Water Tower was under the operational management of St Petersburg University, it was never used and its condition was deteriorating (Water Tower in Pavlovsk)
- For several years, at the order of the Dean of Special Faculty of Continuing Education in Economics, funds in foreign currency were transferred to a deposit account in a commercial bank in violation of the law. The amount of funds deposited was not accounted for in the University’s balance sheet. After the 2008 audit, the deposited funds were returned to the University and reprimands were issued to Irina Kolyshkina, Chief Accountant of the Special Faculty of Continuing Education in Economics, and Ivan Boiko, Dean of the Special Faculty of Continuing Education in Economics
- In the early 1990s, the book collection then housed in the University building at 5 Mendeleevskaya Line of Vasilyevsky Island was illegally handed over to a regional non-profit organisation St Petersburg Society of Naturalists. The collection was based on the so-called Library of the Imperial St Petersburg Society of Naturalists. It included a number of valuable publications from the 19th and early 20th centuries and dozens of thousands of titles in total. The books were transferred without a handover deed; hence, it is impossible to establish their exact number. Only as a result of the intervention by the current rector, St Petersburg University was able to recover this book collection (How we put an end to the chaos)
- In 1999, "in order to optimise the efficiency of the premises", the library of the Faculty of Philology was relocated to a semi-basement and a room on the ground floor of the Jeu de Paum building at 7-9o Universitetskaya Embankment. With a total area of 602 sq. m., the space was only about half of the required amount. Over 120 thousand books and magazines were stored directly on the floor in a semi-basement, which was repeatedly flooded due to sewage and rainwater leaks. As a result, unique editions were damaged by mould and mildew and some were destroyed (A book clinic)
These and other examples from the life of the University show that efficient and accurate accounting and record-keeping practices are essential for the University’s operations. For more details, see the materials featured in the section "University: A Fresh Start" on St Petersburg University’s website: On the way to a unified university: Vice- Rectors for the areas of study; Lease of the University’s Property: Past and Present; Why have St Petersburg University’s property rights not yet been formally registered? Elena Trofimova, Chief Accounting Officer, Head of the Accounting and Financial Control Department, talked about how accounting and record-keeping practices were organised at St Petersburg University in the past and how they are organised now.
Accounting and record-keeping practices at St Petersburg University until 2009
The main goal of accounting and record-keeping practices is to consolidate and summarise accurate data about the financial position, results of economic activity and cash flows of the organisation. The data must be presented in such a way so that it is useful in making economic decisions by an unlimited circle of users of the organisation’s public financial statements. Until 2009, there was no centralised Accounting Department at the University headed by the Chief Accountant of St Petersburg University. Accounting was done by separate accounting departments of the University’s 32 structural units. Most often accountants in these departments would do accounting using different accounting software programmes, such as: Turbo Accountant; Rarus; 1C: Enterprise 7; Access; etc. There was no such a thing as automated accounting and financial consolidation at St Petersburg University back then. That is to say, in the 21st century — until 2009 to be precise, the consolidated financial statements of St Petersburg University were prepared in MS Excel.
Hence, the University administration could not possibly have real control over the state of accounting and tax returns in the University’s structural units. It was impossible to promptly obtain reliable information about properties and liabilities; to assess the financial position of an economic entity, the financial results of its activities and cash flow; and to conduct a complete analysis and reconciliation of accounts receivable and accounts payable of St Petersburg University. At the same time, the volume of accounting and tax returns in structural units comprised about 75% of the total volume. Thus, the University administration had information only about 25%. That is a direct result of the lack of proper accounting and record-keeping practices at the University.
Audit for 2006–2007
In 2008, the new Rector of St Petersburg University initiated an audit of accounting and financial records for 2006-2007. The audit revealed significant deficiencies and violations, including:
- inadequate disclosure in orders on accounting policy regarding significant aspects of budget and tax return accounting and a lack of mandatory accounting and tax returns registers
- systemic deficiencies in the timeliness of updating of the fixed assets register; a substantial overvaluation of residential buildings prices caused by an incorrect revaluation of the fixed assets as on 1 January 1995; discrepancies in the value of other fixed assets and depreciation; discrepancies in the value of intangible assets and depreciation reflected in the accounting and budget tracking records of separate sub-units
- conducting an inventory of the fixed assets with violations and a lack of mandatory inventory records of intangible assets
- registering as intangible assets of items that do not meet the relevant recognition criteria
- systemic deficiencies in the timeliness of material inventories updates in the accounting records
- a lack of mandatory control over material inventories and capital expenditures; and deficiencies in inventory management control and record-keeping
- deficiencies in the timeliness of data updates regarding capital investments reflected in the accounting; deficiencies in the capital expenditures documentation; recording of some capital expenditures as operational expenses, and not as capital investments in fixed assets; and undervaluation of the capital investments as a result of errors in the accounting records for 2006
- discrepancy in data on funds reflected in the accounting and budget tracking records of separate units; deficiencies in the timeliness of recording financial transactions in the accounting records; a lack of a mandatory audit of cash and cash equivalents (except for cash on hand); and
- discrepancy between the cash receipts-and-payments journal and the accounting records discrepancy between the data regarding extra-budgetary funds provided in the bank statement and in the accounting and budget tracking records
- exchange rate miscalculation in reports on foreign currency transactions and a lack of primary documents to account for foreign currency transactions
- discrepancy in the on accounts receivable data reflected in the accounting and budget tracking records of separate units; a lack of a mandatory audit of accounts receivable; and data entry errors of accounts receivable in the accounting software for 2006
- discrepancy in data on settlements with accountable persons in the accounting and budget tracking records of separate units; inadequate paperwork regarding advance reports and travel vouchers; deficiencies in the timeliness of reporting the expenses for accountable amounts in the accounting records due to delayed submission of advance reports; and data discrepancy between the primary documents and accounting records for settlements with accountable persons
- miscalculation of exchange rates in foreign-travel transactions recording and foreign currency payables transactions
- discrepancy in data on accounts payable reflected in the accounting and budget tracking records of separate units; and non-compliance of the primary documents for accounts payable with the requirements of the regulatory documents
- deficiency in the timeliness of accounts payable records in the accounting records and a lack of a mandatory audit of accounts payable
- including in the accounting records of overdue payables for which the limitation period expired
- discrepancy in data on overdue receivables reflected in the accounting and budget tracking records and
- a lack of work to recover the debts, for which the responsible officials were identified a lack of a mandatory audit of settlements with the federal budget and discrepancy in data on settlements with the federal budget reflected in the accounting and budget tracking records of separate units
- systemic discrepancy in the amounts of tax deductions for VAT between the accounting records, the purchase (sales) book and the tax declaration
- a lack of unified books of purchases and sales
- violation of the procedure for calculating property tax and undue applications for property tax exemptions or reductions
- discrepancy in payroll data reflected in the accounting and budget tracking records; lack of time sheets; lack of payroll records for individual employees; and miscalculation of personal income tax in respect of individual employees
- data discrepancies between the primary documents, accounting records and declarations for the unified social tax
- discrepancies in the accounting and budget tracking records on the amounts of income and expenditures of the organisation; violation of the procedure for income and expenditure accounting; and deficiency in the timeliness of recording income and expenses in the accounting records
- non-compliance of the provisions and procedure for registration of real estate lease agreements with the current legislation
- incorrect paperwork and (or) incomplete documentation regarding the expenditures of the organisation and a lack of primary documents supporting the expenses
- discrepancy in balances for 31 December 2005 and 1 January 2006 between the outgoing amounts in the budget tracking records for 2005 and the incoming amounts in the budget tracking records for 2006
- discrepancy in balances for 31 December 2006 and 1 January 2007 between the outgoing amounts for 2006 and the incoming amounts for 2007in the budget tracking records of separate units; and
- non-compliance of the applied accounting methodology on the off-balance accounts with the regulatory documents; and lack of the off-balance accounting for land plots, real estate properties taken into use, and vacation vouchers
Note that there were no audits at St Petersburg University before 2008. Why should they have been, indeed?
Centralised and computerised accounting system implemented since 2009
What the previous administrators could not and apparently did not want to do for more than 15 years, the new leadership was able to achieve in just one year. In 2009, by the decision of the then Vice-Rector for Research Igor Gorlinsky, the University’s Accounting and Financial Control Department implemented the 1C: Enterprise 7 accounting software system at the University (Order № 1644/1 dated 25 September 2009 ‘On measures to prepare for the implementation of the new accounting software solution "1C: Accounting for a Budgetary Organisation 7"’). In 2009, on the basis of the 1C: Enterprise 7 platform, new licenced software was implemented, which enabled importing the accounting reports of structural units into a unified database and generating the consolidated financial statements for the entire University. In January 2010, in order to optimise the management accounting practices at St Petersburg University, the updated 1C: Enterprise 8 software complex for accounting and tax reporting in the unified information system was implemented. The centralised accounting initiative enabled:
- consolidating the accounting and budget tracking records of the 32 structural units of St Petersburg University
- online monitoring system for: the formation and movement of financial flows; settlements of liabilities; generation of income; and the movement of non-financial assets of the entire University
- importing the accounting and budget tracking records of the University’s core areas from different databases into a unified database and generating a consolidated financial statement and a tax returns report for the University; and
- record-keeping and summarising information on the financial and non-financial assets and liabilities of the entire University
Prior to 2010, the University used unlicenced software to keep records of income from the on-campus accommodation services. In October 2010, St Petersburg University implemented a licenced software product, based on the 1C: Enterprise 8 software platform — the "1C: Accommodation". In 2011-2012, after his appointment as Director of the University Campus, Dmitrii Mikhailov initiated the development of a software product based on the 1C: Enterprise 8 platform — the "1C: Student Campus. Rooms Management". This software package for keeping records on settlements with the residents and generating the relevant analytical reports was implemented at the University in May 2013.
Billing and mailing invoices for monthly accommodation fees to the corporate e-mail addresses of the residents was automated.
In 2009, for the first time, the University conducted an inventory of real estate properties.
In 2010, for the first time:
- a unified accounting and warehouse management database of the University’s non-financial assets was established. Previously, just at the Rector’s Office, there were five separate accounting records databases not entered on a unified balance sheet
- an audit of the funds on a temporary hold was conducted
- an audit of the income from temporary accommodation services was conducted; as part of the audit, a reconciliation of payments to the Settlement Department of the University Campus was carried out in respect of each resident
- data integration and data exchange regarding concluded agreements, counterparties, and accounts between the software system "Turbo Accountant 9" and the "1C: Accounting for a State Institution 8" was implemented within the framework of the agreement of 28 January 2010 № 35/09-OK (ED). This allowed for additional control over payments in the public procurement monitoring system; prompt receipt of information and timesaving solutions for documents created on the 1C: Accounting for a Budgetary Organisation 8 software
In 2011, St Petersburg University commenced commercial operation of the SAP Human Resources Management and Payroll software system. This enabled employees of the Financial Planning Department, the Human Resources Department and the Accounting Department to work in conjunction. This also provided the flexibility to generate consolidated financial statements. Since 1 January 2011, accounting of cash flow on the single University’s account in respect of the 24 sub-accounts was organised. Control over the movement and balances of funds was implemented separately for each sub-account.
Since the fourth quarter of 2010, all foreign exchange transactions have been carried out on a single foreign currency account, which allowed for ensuring control over foreign exchange transactions in the core areas.
Transition of St Petersburg University to a new type of financial support through grants
Due to the transition of St Petersburg University to a new type of financial support through provision of subsidies starting from 1 January 2012, the University’s accounting and records management system switched from the Instruction on the Chart of Accounts approved by Order of the Ministry of Finance of the Russian Federation № 162n dated 6 December 2010 "On Approval of the Chart of Accounts and the Instruction on Its Application" to the Instruction on the Chart of Accounts approved by Order of the Ministry of Finance of the Russian Federation № 174n dated 16 December 2010 "On Approval of the Chart of Accounts and the Instruction on Its Application".
The accounting practices at St Petersburg University were transferred from the 1C: Accounting for a Budgetary Organisation 8 software system to another edition of the automated information processing system — the "1C: Enterprise 8", namely the "1C: Accounting for a State Institution 8". On the basis of the 1C: Accounting for a State Institution 8 software, a method for recording data on the authorisations for budgetary expenditures was developed and implemented in accordance with the requirements of budget legislation and Instructions № 157n and № 162n.
In 2012, for the first time, alongside the budget tracking records (Instruction No 191n), the accounting records, formed in accordance with the new rules (Instruction No 33n), were submitted to the Federal Treasury and the Accounts Chamber. St Petersburg University is obliged to prepare financial statements due to the changes in the type of a state institution and the type of funding through the provision of subsidies from 1 January 2012.
Pursuant to Order of the Senior Vice-Rector for Economy № 4816/1 dated 30 December 2011 "On Suspension of Cash Acceptance and Disbursement Through Selected Cash Desks of St Petersburg University", 22 central cash offices were closed at the University. Cash acceptance and disbursement were organised at the central cash desks at the following addresses:
- 3 Filologichesky Lane, lit P (administrative building), St Petersburg
- 62 Chaikovskogo Street, St Petersburg
- 3 Ulyanovskaya Street, Peterhof, St Petersburg
The University-wide agreements were signed regarding:
- the provision of cash collection services, calculating and depositing cash into the account and cash-in-transit services for St Petersburg University; and
- the reimbursable services for the maintenance and repair of cash registering equipment at St Petersburg University
23 cash registers were re-registered: de-registered with Federal Tax Service No 3 in St Petersburg and then re-registered with Federal Tax Service No 16 in St Petersburg.
Inventory accounting of forms of strict accountability was organised in the 1C: Accounting of a State Institution 8 programme.
Record-keeping of payroll and scholarships deposits was organised in the unified 1C: Payroll Deposits information system.
Centralised payment of personal income tax and insurance contributions to extra-budgetary funds by reference to the St Petersburg University registration numbers was ensured.
In 2012, due to the transition to the centralised payment of personal income tax, St Petersburg University units located in St Petersburg were transferred to Federal Tax Service № 16 in St Petersburg.
St Petersburg University was de-registered with the territorial bodies of the Pension Fund and Social Insurance Fund of the Russian Federation at the locations of the St Petersburg University units.
In order to harmonise the accounting and tax returns of small boats registered with St Petersburg University, an unscheduled physical inventory of the above-mentioned vessels and a reconciliation of the records with the State Inspectorate for Small Boats were initiated.
Single account and further centralisation of payments
In 2013, in order to optimise the University’s accounting practices, changes were introduced in the Accounting Policy of St Petersburg University regarding records of the provision of subsidies to St Petersburg University and the allocation of subsidies to sub-accounts in the accounting and budget tracking records. The changes were implemented using the 1C: Accounting of a State Institution 8 software system.
The procedure for transferring arrears of centralised insurance contributions to the extra-budgetary funds of the Russian Federation was optimised.
In 2013, for the first time, along with the accounting report (Instruction № 191n), the annual financial statement for 2012, prepared in accordance with the new rules (Instruction No 33n) was submitted to the Federal Treasury and the Accounts Chamber of the Russian Federation.
Through the efforts of the employees of the University’s Accounting and Financial Control Department, especially valuable movable property assigned to St Petersburg University was listed. The list was approved by Decree of the Government of the Russian Federation № 2536-r dated 25 December 2013.
Transition was made from the electronic document management systems (EDMS) between St Petersburg University and the Federal Treasury Department for St Petersburg and between St Petersburg University and the Interregional Operations Office of the Federal Treasury of the Russian Federation (Moscow) to the electronic document management system of the Federal Treasury — "Financial Document Management System".
Work was done to optimise and reduce the document flow for the tax returns and payments to extra-budgetary funds. Since 1 May 2013, the 1C: Accounting for a State Institution 8 software system has enabled creating a consolidated application to the same recipient of funds from several applications for cash expenditure for different sub-accounts in the system of the single account of St Petersburg University.
In January 2013, the calculation of student scholarships was transferred from separate scholarship calculation systems to a unified calculation information system based on the 1C: Salary for a Budgetary Institution 8 software.
Record-keeping regarding financially responsible persons and precursor chemicals, and control over targeted spending of funds allocated as subsidies
In order to improve the accounting and record-keeping practices in the collaborative work of the University’s Accounting and Financial Control Department and Financially Responsible Persons Department, a new software module "1C: Records Management of Financially Responsible Persons" was implemented at St Petersburg University. This allowed for:
- operational accounting for non-financial assets, conducted by financially responsible persons at the location of the assets
- record-keeping of decorative and applied arts objects with photos attached
- electronic warehouse inventory management
- chemical inventory management; and
- barcoding of non-financial assets, which enables conducting an inventory using a portable data terminal (PDT)
In order to centralise the inventory management for warehouses and retail outlets of St Petersburg University’s book stalls and bookshops (located at: 21-26 Tavricheskaya Street and 5 Mendeleevskaya Line), a new software module "1C: Trade Management" with a barcode scanner was implemented. Additionally, the 1C: Accounting of a State Institution 8 software system was upgraded with a barcode generator.
Since August 2015, a monthly inventory of precursor chemicals included in Table I, List IV has been conducted at St Petersburg University. For details about the situation with precursors at St Petersburg University, see Chemical waste transported in tens of tons, including virulent poisons. Based on the precursor inventory reports, a precursor balance sheet is prepared. The form of a precursor balance sheet was developed by employees of the University’s Accounting and Financial Control Department and is now included in the List of forms of primary accounting documents developed at the University (Appendix No 12 to the Accounting Policy of St Petersburg University).
In 2015, for the earmarked funds provided to St Petersburg University in the form of targeted subsidies and subsidies for capital investments (types of financial support codes 5 and 6, respectively), the expenditure control was automated in accordance with the established planned assignments. The record-keeping of the actual expenditures for each type of targeted subsidy was organised in respect of operation codes in the classification of operations of public administration.
For the targeted subsidies provided to St Petersburg University for the implementation of the University Strategic Plan, additional expenditure control and accounting for actual expenses was organised in accordance to the list of activities (expenditure areas) in the Strategic Plan approved by the Order of the Vice-Rector for Economy.
Accounting policy of St Petersburg University, online cash register software, record-keeping and electronic budgeting
In 2016, a new Accounting Policy of St Petersburg University was developed for the purposes of managing accounting and tax returns (Order of the Senior Vice-Rector for Economy № 4604/1 dated 7 June 2016). The guidelines of the new Accounting Policy have been implemented at St Petersburg University since 1 January 2016.
In order to reduce the University’s accounts payable to the federal budget, a form of a quarterly financial statement of the institution’s expenditures on earmarked funds was developed. The procedure and deadlines for generating the report were approved by Order № 5946/1 dated 25 July 2016.
With the enactment of Federal Law No 290-FZ dated 3 July 2016 ‘On Amendments to the Federal Law "On the Application of Cash Registers in the Implementation of Cash Settlements and (or) Calculations Using Payment Cards and Certain Legislative Acts of the Russian Federation"’, a transition to online cash register software was initiated at the University’s central cash offices, starting from 1 July 2017. This enables:
- a direct transfer of settlement data via fiscal data operators to the offices of the Federal Tax Service of Russia; and
- emailing electronic copies of receipts to customers upon request
Additionally, personnel have been trained to work with the new cash register equipment.
In order to ensure the effective information exchange between St Petersburg University and Sberbank (as part of the Salary project), the University implemented the Sberbank Business Online system.
In 2017, the University joined the state integrated information system for managing public finances "Electronic Budget" in order to generate and submit financial reports on behalf of the recipients of federal funds and chief managers of federal funds and financial statements of the budgetary and autonomous organisations to the Federal Treasury of the Russian Federation through a subsystem "Accounting and Records Management". Accordingly, the uploading of report files into the system and subsequent consolidation of the reports within the powers of the recipient of federal funds and the chief manager of federal funds were streamlined.
In 2018, the uploading of payment registers into the 1C: Accounting of a State Institution 8 information system in respect of counterparties and types of paid services of St Petersburg University, connected to the University’s Unified Payment Service, was implemented. In order to implement the new Federal Accounting Standards for Public Sector Organisations, the following provisions were made at St Petersburg University:
- New Accounting Policy of St Petersburg University (Order of the Senior Vice-Rector № 12921/1 dated 28 December 2018 with amendments approved by Orders: № 11923/1 dated 4 December 2019; № 12139/1 dated 10 December 2019; and № 13362/1 dated 30 December 2019). Provisions of the Accounting Policy have been implemented in the accounting practices of St Petersburg University since 1 January 2019
- New document flow schedule (Order of the Senior Vice-Rector № 12919/1 dated 28 December 2018 with amendments approved by Orders № 9937/1 dated 10 October 2019 and № 13466/1 dated 31 December 2019). The order regulates the legal relations arisen since 1 January 2019
Accounts receivable and payable
The basics of accounts receivable and payable are simple: payables represent money that you owe to creditors, whereas receivables represent money debtors owe to you. Who are debtors and creditors? All individuals and legal entities with whom an institution has concluded civil law contracts are referred to by the term "contractors". These include business contractors, suppliers and customers, as well as employees, students and other individuals who provide services to the institution under civil law contracts.
The debt, or money owed, is both an asset for one party to the contract and a liability or expense for the other. It is shown on the balance sheets of both parties to the contract: as an asset for one and as a liability for the other.
It is the duty of the head of any company to organise proper accounting and control over settlements with counterparties. Due to the fact that no centralised accounting and control system existed at the University before 2008 (On the way to a unified university: Vice- Rectors for the areas of study; Why have St Petersburg University’s property rights not yet been formally registered?), the new University administration, in order to prevent arrears and bad debts, had to quickly and effectively establish control over settlements with the counterparties, including regular reconciliation of mutual settlements. This allowed for timely monitoring and managing discrepancies through identifying outstanding accounts and their cause and resolving them.
Between 2008 and 2011, enormous efforts were made to reduce accounts receivable and accounts payable without hiring additional staff, including:
- settlements with suppliers and contractors, including advances paid
- settlements with accountable persons
- salaries, allowances and student scholarships
- settlements with the federal budget
- settlements with depositors
- settlements on income from the provision of paid services, first of all degree and non-degree programmes; and
- settlements with payers on rental income
Settlements with accountable persons
In order to avoid overdue receivables regarding settlements with accountable persons, the completeness and timeliness of payment records should be monitored, in particular:
- the compliance with the procedure and established norms for the issuance of cash on report
- the timeliness of submission of advance reports by the accountable persons on the spending of funds issued in advance and the completeness of documents confirming the expenditure of the accountable amounts issued in advance
- auditing settlements with accountable persons
- the completeness of the inventory of material assets acquired for cash; and
- the completeness and correctness of the records of the transactions on account 208 00 "Settlements with accountable persons". Only since 2008, constant monitoring and full control over the settlements with accountable persons have been ensured
At present, if the period for which the advance was issued has already expired, while the employee has not returned the unspent amount of the accountable amount issued in advance and has not submitted an advance report on the business trip expenses, an employee of the Accounting and Financial Control Department will follow the Regulations on the reimbursement of travel expenses of St Petersburg University’s employees. First, such regulations appeared at St Petersburg University in June 2010 — by Order No 1575/1 dated 30 June 2010. The Head of the Accounting and Financial Control Department and the Head of the Human Resources Department must be informed about the accounts receivable reflected in the accounting records to make an administrative and managerial decision.
The successful efforts to pursue the settlement of arrears with the accountable persons in 2015-2017 are illustrated by the following statistics:
Type / period
|Settlements with accountable persons, overdue on 1 January 2015|
|Irrecoverable debts written off by the order (as a result of an audit)|
|Overdue debts voluntarily repaid|
|Settlements with accountable persons, overdue on 1 January 2016|
|Irrecoverable debts written off by the order (as a result of an audit)|
|Overdue debts voluntarily repaid|
|Settlements with accountable persons, overdue on 1 January 2017|
Irrecoverable debts written off by the order (as a result of an audit)
Since 2018, all unsettled debts of accountable persons are current liabilities.
Payroll settlements: salaries, allowances and student scholarships
Until 2008, the payroll of St Petersburg University’s employees was calculated without primary documents accounting for the work actually performed, in violation of Article 9 of the Federal Law "On Accounting". Such actions constitute a ground for administrative and even criminal liability. Since 2009, the payroll has been calculated based on the timesheets submitted by the heads of departments.
As a result of the transfer of the payroll from cash to non-cash settlement by issuing payroll debit cards for the University’s employees, the need to pay salaries from the cash desk has been eliminated (Minutes of the Rector’s Meeting held on 4 April 2011; Minutes of the Rector’s Meeting held on 21 May 2012; Minutes of the meeting with public held on 21 April 2015). Payments from the cash desk are made only to newly hired employees, employees who have recent changes in their documents, or employees whose accounts are temporarily blocked.
A virtual exit clearance form
Dismissal of an employee or a student without completing the exit clearance form or its equivalent entails the risk of accounts receivable for material assets or funds of St Petersburg University that were issued before the dismissal but have not been returned. Prior to 2008, it was not infrequent at the University that a financially responsible person would be dismissed without handing over the material assets to another financially responsible person, or employees who would have used their annual leave in advance (by agreement with the administration). To resolve this issue, the liability of officials for scheduling annual leaves and raising awareness of the consequences of taking a leave in advance among the subordinates was increased. Financially responsible persons should also be aware of the obligation of return of the material assets taken into custody to St Petersburg University in a timely manner (handover to another financially responsible person).
In order to minimise such risks, internal control measures and total payroll reconciliations are undertaken before a dismissal of a student and before the final settlement upon a dismissal of an employee. Employees of the Academic Affairs Department (in respect of students) and the Human Resources Department (in respect of employees) ensure that the heads of the relevant departments of St Petersburg University are informed of the impending dismissal, including:
- the Head of the Accounting and Financial Control Department or his/her deputies — for the reconciliation of tuition fee payments; payments for student accommodation; annual leave payments (including those paid in advance); advance reports on business trips; and other obligations of which the student or employee is a contractual party
- the Head of the Department for Material Assets Development and Management — to verify the safekeeping of the property transferred for use into halls of residence; to verify the return of the assets held in custody by an employee on a safekeeping receipt (tablets, laptops, etc.); and to arrange an unscheduled physical inventory of the property held in custody before the dismissal of a financially responsible person; and
- the Director of the M Gorky Scientific Library of St Petersburg University — to check on overdue library books
In this way, the idea of a virtual exit clearance form was implemented, with St Petersburg University students and employees being exempt from the obligation to collect signatures confirming the absence of debts to the University (verification is done without their participation, in automatic mode). Thus, we can state the positive trend in debt reduction.
Accounts receivable for student tuition: degree and non-degree programmes
Before 2008, there was no University-wide system for record keeping of tuition receivables at St Petersburg University. At present, in order to prevent accounts receivable for student tuition for degree and non-degree programmes, the Accounting and Financial Control Department send monthly statements to the Deputy Heads of the Academic Affairs Department regarding:
- persons who paid tuition fees for non-degree programmes
- persons who paid candidate examination fees
- persons enrolled at St Petersburg University on degree programmes for an inclusive individualised curriculum; and
- arrears in tuition fee payments for degree and non-degree programmes on the first of the month following the reporting month
Based on the data obtained, the Deputy Head of the Academic Affairs Department analyses the reasons for non-paying tuition fees and communicates with the student.
Here are the statistics on the dynamics of accounts receivable for student tuition.
As on 1 January 2015, the amount of arrears regarding:
- student tuition for degree programmes was 5,658,842.93 roubles
- student tuition for non-degree programmes was 2,936,232 roubles
As on 1 January 2017, the amount of arrears regarding:
- student tuition for degree programmes was 2,541,757.79 roubles (a 55.1% reduction in the amount of arrears compared to 1 January 2015)
- student tuition for non-degree programmes was 492,938.5 roubles (a 83,2 %reduction in the amount of arrears)
Settlements associated with property income
In 2010, St Petersburg University conducted an audit of settlements associated with rental income. Before that, a mandatory annual audit of these settlements required by the law had not been conducted at the University for over 12 years.
During the audit, the following errors in the accounting records of rental income payments were identified and corrected:
- between 2006 and 2008, in violation of paragraph 149 of the Accounting Instructions, account 1.205.02 "Settlements associated with property income" was used for records of expenditures on the acquisition of fixed assets and current repairs at the St Petersburg University Campus. Thus, as on 1 January 2010, in the accounting records on account 1.205.02, there are 145 counterparties in arrears for rent
- throughout 2010, corrective transactions were made, which resulted in a decrease in total accounts receivable by 33,639,705 roubles; and the total number of counterparties who are in arrears reduced to 105
- between 2006 and 2007, in violation of Article 10 of the Law "On Accounting", cash receipts from rental income were erroneously recorded in the accounting books of two units of St Petersburg University at the same time throughout 2010, corrective payments were made, which resulted in a reduction in the total debt by 32,355,423.37 roubles
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These performance indicators are to be attributed to the efforts and systematic restructuring of the interaction between the University’s administrative departments (Legal Affairs Department; Academic Affairs Department; Accounting and Financial Control Department; Settlement Department; Publishing House; Department for Material Assets Development and Management; Department of Real Estate and Land Resources, etc.), focused on achieving common goals and clearly defined objectives for prevention and effective management of overdue receivables in future and clearing of the existing debts.
When necessary, St Petersburg University officials issue by-laws on certain types of contracts, establishing the specific arrangements for managing receivables. Thus, in particular, clarifying regulations were issued to:
- facilitate interaction between employees of the Accounting and Financial Control Department and the Academic Affairs Department (regarding student agreements)
- establish interaction between employees of the Accounting and Financial Control Department, the Department of Real Estate and Land Resources and the Deputy Rector for Security (regarding St Petersburg University’s property leases)
Monitoring of settlements with counterparties (legal entities and individuals) at the University is carried out daily through verification of the accuracy of records in the accounting registers in respect of the counterparties and agreements (internal financial control is conducted).
For prevention and management of overdue receivables, the University’s accounting staff sends a monthly statement to the official who concluded agreements on behalf of St Petersburg University regarding accounts receivable in the accounting records.
Timely control and analysis of the status of settlements with counterparties allow for spotting and handling overdue receivables through: settlement reconciliation; communication with debtors over the telephone; face-to-face communication; email reminders; additional agreements; settlement agreements; and instalment agreements to name just a few).
Also, information on the status of settlements with counterparties for: communication services; property maintenance; sports and recreational activities; hotel services; testing services; etc. is provided upon request to the managers responsible for concluding agreements and managing settlements with counterparties on a routine basis.
Currently, every official who has entered into a contract on behalf of St Petersburg University (under which the University expects to receive income from the provision of educational services, accommodation services, etc.) will closely monitor the contractual payer’s compliance with the established payment schedules and procedures (including joint reconciliations with the Accounting and Financial Control Department).
In turn, the official who concluded an expenditure agreement will monitor the schedule, amount and quality of contractual performance. If necessary, they will take measures to: return the advance paid money; and recover penalty fees under the contract for improper performance of contractual obligation by the University’s counterparties to name just a few.
When overdue accounts receivables are identified, the employees of the Accounting and Financial Control Department together with the signatory of the agreement / contract, in accordance with by-laws of St Petersburg University, initiate pre-judicial regulation of the overdue debts. When the administrative possibilities for recovering overdue payments are exhausted, the documents are handed over to the Head of the Legal Affairs Department for the organisation of the debt recovery through legal proceedings. The above mentioned procedure is generally reflected in the published Regulations on the overdue receivables.
Based on the above and in view of the restructuring of St Petersburg University’s operations, it can be stated that overdue receivables are now managed through:
- regular reconciliation of settlements with counterparties of St Petersburg University
- mandatory pre-legal action when outstanding payments run past their scheduled payment date
- generating and keeping written evidence of overdue receivables until the complete repayment
- inadmissibility of debt cancellation; and
- the timely transfer of the cases of overdue debts to the Head of the Legal Affairs Department for debt recovery through legal proceedings (within the debt recovery limitation period and taking into account the pre-legal action)