Assistance provided to one budgets at the expense of others makes it possible to implement various projects, overcome the consequences of emergencies, and perform other socially significant tasks. The concepts of subsidies and subventions are often identified, but they have a number of differences. Let's try to figure out how significant they are and how they affect the principles of receiving and spending money.
Subsidy - these are funds that are provided to the lower-level budget to the higher-level ones for current expenses on the terms of irrevocability and gratuitousness. It is also a method of financial regulation of the market, which allows producers to reduce their costs at the expense of the state, which leads to price fixing.
Subvention is funds allocated from the higher budget to the lower ones for certain purposes, the observance of which is mandatory. If this principle is not observed, then financial resources are subject to return.
Thus, the most important difference between the categories is their purpose, which determines the need to return or the absence of such an obligation. The subsidy is allocated to the budget for operating expenses, and this is due to insufficient funds. The subvention is provided for a specific project, therefore, targeted spending is mandatory. In case of any violations, the funds are subject to return.
Accordingly, control over the efficient use of subsidies, as a rule, is not carried out. And the expenditure of the subvention must be reported by submitting documents confirming its targeted posting.
- Purpose. The subsidy is allocated for operating costs associated with the need for additional funding. The subvention is allocated for specific needs.
- Monitoring and reporting. As a rule, the spending of the subsidy is not subject to verification: the main thing is that the funds are not spent in violation of the law. In contrast, a report on the expenditure on the subvention is required.
- The need to return. There are no goals for the donation, so there is no need to return these funds. If the subvention is used inappropriately, then the funds are subject to return.
- Features of the provision. A subvention is allocated for a specific project, and a subsidy is allocated due to a lack of money for the current expenses of the lower budget.