Who is responsible for monitoring the University’s financial and economic activity and how to do this: Past and present

Established by Peter the Great’s decree in 1724, St Petersburg University is Russia’s only university with 290 years of history. The special status of the University, as the oldest university in Russia, is granted by the Federal Law “On Lomonosov Moscow State University and St Petersburg State University”, which states that St Petersburg University and Moscow State University are granted the special status of “unique scientific and educational complexes, the oldest institutions of higher education in Russia, being of great importance to the development of Russian society”. Today, the St Petersburg University student body is over 30,000.

Just as the University is recognised around the world for excellence in research and education, so it is a cohesive economic institution, which comprises a complex of buildings and premises, a wide range of sophisticated equipment, and is operated by specialists who are responsible for maintenance and asset management.

Today, St Petersburg University owns over 350 buildings and premises, among which 60 buildings are cultural heritage sites. The University’s special status grants the following:

• a separate line in the budget of the Russian Federation;
• the right to organise additional admissions tests as part of the application to all degree programmes;
• the right to establish its own educational standards at the University’s discretion;
• the right to award its own scientific degrees;
• the right to establish its own selection procedure to recruit academic staff;
• the right to appoint the Rector of St Petersburg University by the decree of the President of the Russian Federation.

The fact that the University is granted this special status has little effect, if any, on how to tackle issues related to assets management and economic activity. St Petersburg University, like any other university in Russia, shall comply with the legislation and meet the requirements which are imposed by financial monitoring and surveillance agencies, agencies for supervision in education and healthcare, agencies for surveillance on consumer rights protection, and others.

Thus far, there have been 2,000 public debates and discussions about whether the University should be granted special rights and privileges, in particular a separate line in the budget. This idea was supported by Dean I.P. Boiko and Dean N.M. Kropachev, to name but a few, who stressed that introducing a separate line in the budget would open up an opportunity for University administration to increase the budget, like Moscow State University, which has had a separate line in the budget for many decades. Those who opposed the initiative, among them St Petersburg University chief accounting officer R.I. Tsvetov and Vice-Rector for Facilities Management L.V. Ognev, were anxious to stress that they remained uncertain whether the initiative would bring about an increase in the budget. Should this happen, as unlikely as it may be, it would eventually end in regular monitoring by the Accounts Chamber of the Russian Federation. This was met by a tit-for-tat reaction by their opponents, who said, “Fine. It will bring order!” (Let us recall that in 2006–2010, Vice-Rector L.V. Ognev and engineer-in-chief Yu.V. Chekalin pleaded guilty of embezzling millions from St Petersburg University, and therefore were imposed a sentence: see A scandal at St Petersburg University: Serious financial violations exposed; A Vice-Rector of St Petersburg University receives an 8-year suspended sentence; Builders convicted for embezzlement at St Petersburg University; St Petersburg University engineer-in-chief  pleads guilty to embezzling 38 mln from the budget, Fontanka, 09.08.2010; St Petersburg University engineer-in-chief  pleads guilty to embezzling 38 mln, Delovoy Peterburg, 10.08.2010; St Petersburg University engineer-in-chief judged for embezzling 38 mln allocated for St Petersburg University reconstruction, Pravo.ru, 09.08.2010.)

In 2008-2015, such new measures as introducing a separate line in the budget, immediate subordination to the government and the privilege to appoint the Rector by the President of the Russian Federation, raised finances allocated from the Federal Budget for research more than three times and for education more than twofold.

Annually, the University, due to its specific nature and a significant number of real estate assets in operation, is subject to monitoring and surveillance by government surveillance agencies and federal services, among which are: the Accounts Chamber; the Federal Service for Supervision in Education and Science; the Federal Service for Surveillance in Healthcare; the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing;  the Federal Tax Service; the Prosecution Service;  the Federal Antimonopoly Service;  the Federal Agency for State Property Management; the Federal Service for Intellectual Property;  the Federal Treasury; the State Labour Inspectorate; the State Fire Control Service;  the State Administrative and Technical Inspectorate; the Federal Environmental, Industrial and Nuclear Supervision Service; the Federal Drug Control Service;  the Committee for Nature Use, Environmental Protection, and Ecological Safety;  the Committee for the State Inspection and Protection of Historical and Cultural Monuments;  the Federal Subsoil Resources Management Agency; the recently abolished Federal Migration Service, Federal Service for Fiscal and Budgetary Supervision , Ministry of Education and Science, and labour inspection, to name but a few.

Each year, dozens of regular and unscheduled inspections are conducted by monitoring and surveillance agencies and services. Such inspections are conducted as complaints and claims are received from both citizens and legal entities. This results in ordering University administration to investigate the claims and complaints, verify the discrepancies, report to the complainer and send a copy of the report to the relevant agency. Although the agencies and services receive fewer claims and complaints against University administration, unlike against other universities under Government jurisdiction, nevertheless such claims and complaints number in the dozens each year.

Upon completion of the inspection, if violations are exposed, a monitoring and surveillance agency issues an order to eliminate them at stipulated time. It should be useful at this point to mention some aspects specific to monitoring and surveillance by the services and agencies. For starters, just as laws and regulations are subject to change, so are the surveillance requirements, which tend to be, not infrequently, introduced spontaneously, without public debates, allocating appropriate funds and time resources to respond to the changes and start to implement them in practice. Second, the monitoring and surveillance agencies implement the same laws and regulations differently.

An obvious example of how the agencies tend to implement laws differently is orders issued by the EMEROM fire authorities to eliminate fire safety violations in buildings owned by St Petersburg University. Execution of such orders, far too often, contradicts and violates cultural heritage laws and national laws currently in force related to the protection of cultural heritage (historic and cultural monuments) of the peoples of the Russian Federation. (For example, there is no second exit from Petrovsky Hall in the Twelve Collegia, which will be discussed below.)

The provisions of the law and regulations, moreover, are subject to uncertain interpretation by sub-offices of the agencies and services located in various regions and districts. The buildings owned by St Petersburg University are located in eight administration districts of St Petersburg (Vasileostrovsky, Tsentralny, Admiralteysky, Vyborgsky, Nevsky, Primorsky, Petrodvortsovy, Pushkinsky), and in Leningrad and Belgorod regions, Krasnodar Krai, Karelia and Crimea.

Third, variability in interpretation is also due to human factors: when performing supervision and surveillance of the institution, some of the officers do tend to indulge their idiosyncrasies at work. The most notorious examples are those who work as EMERCOM fire officers, who, when monitoring compliance with fire safety regulations, expose violations and conceal some of them by specifying only a few when making a report, thus leaving them “for the future”. If the University fails to comply with the laws and regulations, it is held administratively liable and is issued an order to remedy a failure by paying a fine. The University remedies the failure and executes the order to the extent it requires.

Should the University staff be informed about other violations which are intentionally not recorded in the report, they would definitely remedy the failure. Yet the violations are secreted – till the next inspection.  Half a year or a year later, fire safety officers officially monitor the progress against the orders which were issued during the previous inspection and list “newly-exposed” violations in the fire inspection report. These “newly-exposed” violations, although previously revealed, have remained undisclosed to the University so far. The main thing is not just that the University is enforced to pay another fine (were these violations reported during the first inspection, the University would be issued one fine only). Rather, the problem is extra risks associated with the remaining violations!

There are other discrepancies as well. Let us take the following example: EMERCOM orders to replace partitions which are made from the material that, according to a fire inspector, does not comply with the fire safety requirements. The University dismantles the partition and installs new ones made from another material. A year after, the fire inspector orders to re-install the suspended ceiling system in the same room. As a result, a new wave of construction, renovation and maintenance is well underway! A year later, the University is issued an order to change the floor coating in the same room… And so on and so forth!

The situation is the same with Federal Laws “On the contract system in the purchase of goods and services to meet state and municipal requirements” No 44-FZ of April 05, 2013 and “On the contract system in the purchase of goods, works, and services by legal entities” No223-FZ of July 18, 2011. Just as the FAS offices in different regions and districts (in St Petersburg, Moscow, and its central office) approach them differently, so do different offices of the Federal Antimonopoly Service in St Petersburg. They adopt decisions that are diametrically opposed to each other when dealing with identical legal situations. Moreover, tender or auction documents tend to be exposed to repeated inspections by the FAS office two or even three times, with some violations “unnoticed” during the first inspection and exposed during the next rounds. How do private entities “neutralise” an inspector of this kind? How had these issues been discussed before St Petersburg University refused to set its own admissions tests and accepted Unified State Exam results? The answers are far from being unknown!

To remedy the failure in due course calls for intensified joint efforts and coordination between St Petersburg University specialists in preparing and verifying comprehensive technical documentation to be approved by a number of federal agencies and authorities, and finance allocated to eliminate violations. Surprisingly, at St Petersburg University there was no relevant department to perform the tasks mentioned above. From the early 1990s to 2010, the deans were responsible for operating and maintaining the buildings, without appropriate specialists. It is not a coincidence that this was a time when the University buildings were extensively remodelled and replanned using budget funds and through income generating activities (see St Petersburg University buildings: Illegal remodelling and reconstruction ). The most notorious violations occurred during the reconstruction of the following buildings at:  7-9-11 Litera C, OA Universitetskaya Emb. and 3 Litera P Philologichesky per., St Petersburg.

In the building at 7-9-11 Litera OA Universitetskaya Emb., St Petersburg, the upper-story structures were reconstructed (the loft was transformed into an attic). In the building in 3 Litera P Philologichesky per., illegal reconstruction and the construction of the fifth storey were under the agreement between the deans in relation to the renovation project before 2008. In the buildings in 7-9-11 Litera S and Sh Universitetskaya Emb., St Petersburg, the reconstruction of the buildings housing the M. Gorky Scientific Library was not regulated by the reconstruction project approved by the relevant authorities and funded from the federal programme. Rather, they were reconstructed in a rather inconsistent manner.

This is budget exhaustion, pure and simple (see  Malicious intent or criminal negligence?). In 2005–2006, a number of wings were adjoined to the main central structures, which were not specified in the projects, and one of the reconstructed buildings was adjoined to the gas boiler building. In 2007-2008, all these obvious violations suspended the funding. Also, there was discussed reconstruction of the building at 7-9-11 Litera Sh Universitetskaya Emb., St Petersburg, for education purposes. It was not, however, feasible, as urban planning legislation and regulations on cultural heritage reconstruction were subject to tough alterations and amendments. Thus, today it is hardly possible to approve the design and reconstruction project by the Committee for the State Inspection and Protection of Historical and Cultural Monuments (see Minutes of the Rector’s Meeting of October 07, 2013).

In 2009–2010, the Real Estate and Land Management Office was established. Previously, the registration of St Petersburg University’s title to real estate had hardly been in the focus of attention, and the issue of how to legitimate reconstruction and remodelling works carried out with the violations had been intentionally disregarded (see Why St Petersburg University has not so far registered its title to real estate assets?).

Since 2010, the University has been, slowly but surely, legitimating real estate owned by St Petersburg University on the basis of operational management and under lands and reconstruction projects. Yet the bondage of the previous effective management and work of a number of deans during 2008-2016 have impeded obtaining the licence to operational acceptance of the following buildings:

1. 7 lit.A 22 Line, V.O., St Petersburg;
2. 7-9-11 lit. OA Universitetskaya Emb., V.O., St Petersburg;
3. 7-9-11 lit. C Universitetskaya Emb., V.O., St Petersburg;
4. 3 lit. P Philologichesky per., V.O., St Petersburg;
5. 5 lit. A Ulyanovskaya street, Petergof, St Petersburg;
6. 35 lit. B Universitetsky pr., Petergof, St Petersburg;
7. 35 lit. E Universitetsky pr., Petergof, St Petersburg;
8. M, pos. Tarasovo, 19thkm of the Sredne-Vyborgskoe shosse, Vyborgsky district, Leningrad region;
9. N, pos. Tarasovo, 19thkm of the Sredne-Vyborgskoe shosse, Vyborgsky district, Leningrad region;
10. 33 building 4 lit. D Tsentralnaya street., der. Zaostrovye, Shamokshinskaya volost, Lodeynopolsky district, Leningrad region;
11. B, pos. Kuznechnoe, Priozersky district, Leningrad region;
12. 8 lit. A 14thstreet, pos. Ulyanovka, Tosnensky district, Leningrad region;
13. 205 lit. M Sovetsky pr., pos. Ulyanovka, Tosnensky district, Leningrad region;
14. 205 lit. R. Sovetsky pr., pos. Ulyanovka, Tosnensky district, Leningrad region;
15. 205 lit. C Sovetsky pr., pos. Ulyanovka, Tosnensky district, Leningrad region;
16. 205 lit. F Sovetsky pr., pos. Ulyanovka, Tosnensky district, Leningrad region,

Moreover, it is not possible to get approvals for replanning and reconstruction. This leads to impossibility, at least so far, to get state registration of right for federal ownership, right to the buildings mentioned above on the basis of operational management, and the right of permanent use of the land plots where these buildings are located. Unless the rights are acknowledged and registered, the buildings are unauthorised constructions.

If the University is rejected from obtaining state registration of the right for federal ownership, right to the building above mentioned on the basis of operational management, and the right of permanent use of the land plots where these buildings are located, it does not mean that the University is not responsible for executing the orders issued by the monitoring and surveillance agencies (EMERCOM, for example); yet the University is not entitled to use budget funds for maintenance and reconstruction of those buildings that shall be registered, which is possible only after these unauthorised constructions are demolished. Catch-22! Thus, the University, if it is to execute the orders issued by the monitoring and surveillance agencies, has to seek extra-budgetary resources.

Expenditures incurred by St Petersburg University since 2008 up to now to eliminate the violations committed by maintenance and operation offices and the deans when performing reconstruction works in the 1990s and up to the late 2000s are estimated over 33 mln roubles, including  the cost for construction assessment of the following buildings located at: 7-9-11 lit. C Universitetskaya Emb., St Petersburg approximately 1,000,000 roubles; lit. Sh approximately 4,500,000 roubles; lit. ОА approximately 1,500,000 roubles; and 3 lit. P Philolgichesky per. 500,000 roubles.

Registration of the titles to the unauthorised constructions is a legal process, and St Petersburg University is not entitled to institute legal proceedings, which is within the scope of the local office of the Federal Agency for State Property Management in St Petersburg. It is St Petersburg University that is to cover expenditures in relation to legal construction and technical expert evaluations, in particular a 60,000 rub expert evaluation of a case, which is being discussed in the Arbitrary Court, of the declaration of the title to the unauthorised construction located at 7-9-11 lit. C Universitetskaya Emb., St Petersburg, 199034.

St Petersburg University is consistent in taking whatever action is needed to execute the orders issued by the agencies. Small events are held without delays using the University’s resources, and if specialists outside the University are required, the University signs the agreement and employs various financial resources for those purposes.

A great deal of the orders are those related to emergency prevention; injury prevention and public health, prevention of environmental damage; compliance with the requirements in operation of the buildings, premises, constructions, equipment and technological processes. The key indicator of continued success in ensuring compliance with the laws and regulations is a decreasing number of items in the orders.

1. Ordersfor emergency prevention

From 2007 to 2016, the State Fire Control Service issued 38 orders: there is no second exit in the Petrovsky Hall in the Twelve Collegia (the only hall preserved in its original state), uneven floor surface to such an extent that violates safety requirements (the first floor is laid on the soil, and there is no basement), there is no railing around the roof; in the Palace of Peter II there is no railing around the roof as well, and the width of the corridors does not fit the current width requirements, etc.

The University was advised to eliminate the following violations: there is no second exit in the Petrovsky Hall in the Twelve Collegia (the only hall preserved in its original state when it had been under Peter the Great), uneven floor surface to the extent that violate safety requirements (since the 18th  century the first floor is laid on the soil, there is no basement), there is no railing around the roof (should such railings be installed, it would violate the preservation order imposed on St Petersburg University to preserve a building of historical and cultural interest), and in the Palace of Peter II there is no railing around the roof, and the width of the corridors in the building constructed in the 18th  century does not fit the width requirements currently in force in the 21st century.

It should be useful at this point to recall that work of any kind in buildings of historical and cultural interest shall be approved by the Committee for the State Inspection and Protection of Historical and Cultural Monuments, with approved technical documentation issued for each type of work. To withdraw the claims, the University had to apply to the Central Department of the EMERCOM Fire Control Service. After long negotiations, the University obtained concurrence to withdraw the claims. To eliminate other violations, the University had to take costly fire safety measures.

Normally construction and building projects are carried out in compliance with the regulations that are in force at the time when the construction is carried out, and the fact that these regulations are subject to constant changes and amendments leads to the catch-22 situation.

The University had allocated vast sums of money to dismantle security bars in the windows that had been installed in the turbulent 1990s and later prohibited, and to remove old doors and install the new ones  in order to comply with the requirement stating that the doors must swing out in the direction of exit, and later, when new “Fire Safety Regulations in the Russian Federation” approved by the Government Decree No 390 of April 25, 2012 were adopted, the requirements were subject to change and alteration once again. In 2014, the amendments to the Federal Law “On amending the Federal Law “Technical Guideline for Fire Safety Regulations”” No117-FZ from July 10, 2012 introduced the requirement to equip every building of an education institution with a fire alarm system that transmits the signal directly to the fire station.

From 2010 to 2015, the University, in eliminating minor violations, had to spend 124,000,000 roubles, thus only partly executing the orders issued by the agencies. A progressive decrease in the number of the violations remained: in 2010 — 1,436; in 2013 — 800; in 2014 — 499; in 2015 — 349; and in 2016 — 265. Thus, the order for emergency prevention issued by the State Fire Control Service decreased six-fold, from 1,520 items in 2008 to 265 items in 2016.

It took years to achieve such impressive results, primarily through changing attitudes to the fire safety regulations of the whole University: from administration staff to ordinary workers, and by working with the students. Today, the University has adopted a practice to issue inner orders by the fire safety office that impose urgent measures to eliminate violations that are exposed during its inspections, which is obligatory for all the University. The disciplinary penalties in this regard, within the scope of the Labour Code, were difficult to avoid and were given to some of the employees.

Today, there are 4 orders in relation to 80 objects issued by the State Fire Control Service. The total amount of funds to eliminate the violations is 365,000,000 roubles, while the total amount of funds to eliminate all the fire safety violations is 495,000,000 roubles. And guess what? As little as 3 mln roubles are allocated from the federal budget for that end.

At some of the premises, St Petersburg University operates gas boiler buildings, so the North-West Office of the Rostechnadzor monitored compliance with the industrial safety requirements when operating explosive industrial objects. In 2015, 3 regular and 1 unscheduled inspection resulted in issuing 3 orders. In eliminating the violations, the University spent 106,000 roubles, with 58 out of 59 violations eliminated.

2. Orders for life and health damage prevention and environmental damage prevention

So far, the University has successfully executed all the orders to develop tentative regulations on waste management issued by the Committee for Nature Use, Environmental Protection and Ecological Safety in 2010-2015.

From 2013 to 2015, St Petersburg University was issued 4 orders by the Rospotrebnadzor. The University designed and approved programmes on inspection of waste water composition and properties; established 3 monitoring areas of wastewater disposed into the Gulf of Finland at 2 Oranienbaumskoe shosse, Petergof (“Sergievka”); a wastewater disposal project for the object at 7-9-11 Universitetskaya Emb.

The University is to execute only one order, the completion of which is scheduled at the end of 2016. Elimination of the violations is executed according to the schedule.

To eliminate the violations, it is necessary to receive 110,000,000 roubles for maintenance of the premises, water and wastewater treatment facilities, engineering systems, workbench setup, and overall repairs, to name but a few.

From 2013 to 2016, the University was issued orders, as a result of one regular inspection and 4 unscheduled inspections initiated after accidents, by the State Labour Inspectorate in St Petersburg. To remedy a failure cost 8,993,973.06 roubles received from the Social Insurance Fund, which permitted the execution of the order for certification of work sites to the full extent, rather than just to train management stuff and workers on occupational safety and health (591 persons), and to offer health checkups for employees (103 persons examined).

3. Fulfillment of cultural heritage preservation requirements and exterior elevation requirements

In 1975, St Petersburg (Leningrad) University was issued 45 preservation orders by monument preservation agencies, which focused on cultural heritage preservation, among which 7 preservation orders did not allow fieldworks at the objects; the requirements of 6 orders have been fulfilled to the full extent, among which 4 orders were executed by using funds from the Ministry of Culture of the Russian Federation through the Federal Target Programme “Culture of Russia (2012-2018)”. The total amount of funds allotted for restoration by the Ministry of Culture of the Russian Federation equals approximately 1,000,000,000 roubles. The requirements stipulated in 7 preservation orders have so far been partially fulfilled, including those fulfilled by the Ministry of Culture and Government of St Petersburg. The main obstacle in cultural heritage preservation is those legal requirements which do not allow the University to use its own resources for reconstruction.  St Petersburg University, due to insufficient funding allotted from the federal budget, has to seek additional financial resources by applying to various programmes implemented by the Government of the Russian Federation. Today, the total amount necessary for executing order issued by the Committee for the State Inspection and Protection of Historical and Cultural Monuments in St Petersburg equals approximately 16,000,000,000 roubles. Just think of it – 16 bln roubles!

To execute orders issued by the State Administrative and Technical Inspectorate, St Petersburg University has designed 46 St Petersburg University exterior elevation certificates to be approved by the Committee for Architecture and Urban Development in St Petersburg, 16 projects on window assembly in St Petersburg University buildings, and 54 architectural and planning assignments for additional equipment. All above-mentioned projects are governed by the decree “On approval of the Regulations on exterior elevation operation and maintenance in St Petersburg” No 1135 issued September 14, 2006 by the Government of St Petersburg. The exterior elevation certificates and window assembly projects were designed exclusively by St Petersburg University engineers, without external agencies, thus the cost savings equals 16 mln roubles.